Consulting

Consulting and
Strategy
Compendium
Department of Management Studies

INDIAN INSTITUTE OF TECHNOLOGY DELHI
(Institute of Eminence, Govt. of India)
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Contents
1. Overview of Strategy and Consulting ................................................................ 3
2. Types Of Consulting ............................................................................................ 3
3. Qualities a consultant should possess ................................................................ 5
4. Top Consulting Firms in the World................................................................... 6
5. Business Strategy Frameworks .......................................................................... 8
5.1 SWOT Analysis ..................................................................................................... 8
5.2 BCG Matrix ......................................................................................................... 10
5.3 PEST Analysis ..................................................................................................... 10
5.4 Porter’s 5 Forces .................................................................................................. 11
5.5 CAGE Distance Framework ................................................................................ 12
5.6 VRIO Framework ................................................................................................ 14
5.7 McKinsey’s 7S Model ......................................................................................... 15
5.8 3Cs Model: Corporation, Competition, and Customer ....................................... 16
6. Guesstimates ....................................................................................................... 17
6.1 MECE Framework ............................................................................................... 18
7. Some Interview Questions................................................................................. 19
SWOT Matrix: ............................................................................................................... 19
BCG Matrix: .................................................................................................................. 19
PEST Analysis: .............................................................................................................. 20
Guesstimates: ................................................................................................................. 20
DEPARTMENT OF MANAGEMENT STUDIES 2

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1. Overview of Strategy and Consulting
Strategy can be defined as "A plan to realize long-term goals". Organizations across
the globe regularly engage with strategy consultants for support in developing and
implementing business strategies. Consulting means "engaged in the business of giving
expert advice to people working in a specific field." The true meaning of consulting is
helping people solve problems and move from their current state to their desired state.
Check out this link to tackle interview questions on why you want to get into Strategy
and Consulting.
So, what is a consultant? A consultant has some level of expertise that a particular
group of people find valuable, and people within that group are willing to pay the
consultant to access their knowledge.
2. Types Of Consulting
The consultancy industry is one of the most diverse markets within the professional
services industry, and, therefore, several different types of consultants are found in the
industry.
Moreover, being a 'consultant' is not a protected professional title like most other
professions, making it possible for anyone to title themselves strategy, management,
business, finance, HR, or IT consultant.
• Strategy Consulting
Strategy consulting is when an organization seeks help from a third party to offer an
outside, expert perspective on their business challenges.
Strategy consultants usually have considerable industry knowledge and are expected to
assess high-level business issues objectively. They take a holistic look at specific
problems companies are dealing with and advise how they should approach them.
Strategy consultants operate at the highest level of the consultancy market, focusing on
corporate and strategic issues like corporate and organizational strategy, economic
policy, government policy, and functional strategy.
Given that nature of strategy consulting differs from the other more implementation
and operation-driven areas, strategy consultants generally have a different profile from
their peers. Their focus lies more on quantitative/analytics skills, and their job
description revolves more around advising than overseeing implementation.
• Management Consulting
Management consultants, also known as business consultants or organizational

advisors in practice, are consultants who focus on all sorts of organizational concerns,

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from strategy to a variety of elements within management. In the methodology upheld

by Kennedy as well as Consultancy.in, Management Consulting is a collective term
used for all services that fall under Strategy Consulting, Operations Consulting, and
HR Consulting. Therefore, more than half of all advisors can be defined as a
management consultant.
• Operations Consulting
Operations consulting deals with advisory and implementation services that improve a
company's internal processes and performance in the value chain.
Operations consultants are responsible for creating more effective client operations by
advising on and supporting the implementation of changes to the target operating
model, functional business processes, management systems, culture, and other
elements part of the value chain.
The market for operations consulting and management services consists of eight
disciplines: Organizational Operations, Sales & Marketing, Supply Chain, Sourcing &
Procurement, Finance, Business Process Management, Research & Development, and
Outsourcing.
• Financial Advisory Consulting
Consultants who operate in the Financial Advisory segment works on questions that
address financial capabilities and, in many cases, also the analytical capabilities within
an organization. Subsequently, the profiles of consultants active in this segment can
vary greatly, from M&A and corporate finance advisors to risk management, tax
restructuring, or real estate consultancy. Consultants specialized in forensic research
and support disputes also fall under the Financial Advisory segment. Most financial
consultants work for large combined accounting and consulting firms, or else for niche
advisory offices.
• Human Resource Consulting
HR consultants help clients with human capital questions within their organizations
and improve the HR department's performance. Chief topics central to HR consultants'
job descriptions are organizational changes, change management, employment,
learning & development, talent management, and retirement. Organizations also bring
in HR consultants to help transform the business culture within their organization or
transform their HR department, including changes in organizational design, processes,
and systems.
• IT Consulting
Technology consultants, also known as IT, ICT, or digital consultants, focus on helping

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clients with the development and application of Information Technology (IT) within
their organization. IT consultants focus on transitions (projects) in the ICT landscape,
contrary to regular IT employees, who work on day-to-day IT operations (so-called
'business as usual.' activities). Most ICT consultants work on implementation projects,
for instance, extensive ERP systems applications, where their role may vary from
project management to process management or system integration. Within IT
consulting, the fastest-growing markets are digital, data analytics (also known as data
science), cybersecurity, and IT forensics.
• Marketing Consulting
Whether you need a new logo for your company, a new market position for one of your
brands, or a new social media strategy to interact with your customers, or planning and
implementing a marketing strategy, a marketing consultant helps in all marketing
aspects of a firm’s business.
• Compliance and Legal Consulting
These consulting services help firms ensure that they adhere to federal and local laws
and regulations. A compliance consultant must have a sound knowledge of local laws
and regulations as it’s essential for successful businesses to be compliant with local and
federal laws.
3. Qualities a consultant should possess

Not everyone is suited for every career option, and Consulting is no exception. Though
consultants are paid higher than their peers, they also have their fair share of
challenges. Few of the many skills that consultants must possess-
• Teamwork: Consultants always work with a team. Be it within their

organization or the client company. Consultants need to work collaboratively
with cross-functional teams and even with consultants from the other firm that
the client may have hired. In short, teamwork is essential to survive as a
consultant.
• Academic Curiosity: Consultants are often put up in various distinct projects in

different domains. The level of academic curiosity needed to be able to analyze
the clients' problems is top-notch.
• Willing to work long hours: Cracking the problem requires an undetermined

amount of working hours. It can be a few, and it can be a lot. More often than
not, it's the latter. An average consultant works around 70 hours per week.

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• Multitasking: The consulting assignments vary significantly in duration,

location, and function. It may require context switching from one deliverable to
another. You need to be flexible enough to handle these anomalous switching.
• Travel: Consultants spend a large portion of their time on client sites. They end
up traveling in whatever free time they have available. As a consultant, you will
most probably spend a lot of time away from family and on the roads.
4. Top Consulting Firms in the World
• McKinsey and Company
McKinsey & Company has been providing strategic advice to corporations and other
organizations since 1926, when James O. McKinsey, a University of Chicago
professor, opened a consulting office in Chicago. Currently Headquartered in New
York, they have offices in over 130 cities spread across the globe and more than 27000
employees.
McKinsey has been working in India for 25 years now, partnering with companies and
public institutions, and currently has four offices in India.
• Boston Consulting Group
Founded in 1963, The Boston Consulting Group (BCG) is a global management-

consulting firm. BCG helps corporations and other organizations innovate and achieve
sustainable competitive advantage. The Boston-based company has an annual revenue
of $8.5 billion and has over 21000 employees.
BCG formally started operations in India in 1995, opening its offices after nearly a
decade of work in India. It currently has offices in Mumbai, Gurugram, and Chennai.

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• Bain & Company
Bain and Company is a top consulting firm specialized in the area of management
consultancy. It was founded in the year 1973, and its headquarters are located in
Boston, Massachusetts. It has an annual revenue of $4.3 billion for the fiscal year
ending on Dec 30, 2019 and has over 12,000 employees.
Since 2006, Bain India has advised clients in India and beyond on their biggest issues
and opportunities. It currently has offices in Mumbai, Bengaluru, and Gurugram.
• Deloitte
Deloitte is a professional services firm offering audit, advisory, tax, and consulting
services across more than 20 industries. Deloitte is one of the Big Four accounting
organizations and the largest professional services network in the world by revenue and
number of professionals, with headquarters in London, England. Deloitte employs
more than 300,000 professionals across 150 countries.
In India, Deloitte has two entities: Deloitte India and Deloitte US-India (USI), which is
a region within the Deloitte US organization, with offices across four cities in India
(Hyderabad, Mumbai, New Delhi, and Bengaluru). Deloitte India caters to clients
within India, while Deloitte USI is an entity of Deloitte US that is geographically
located in India and caters to the US member firm's clients.
• PricewaterhouseCoopers
PricewaterhouseCoopers LLP (PwC) provides professional services. The Company

offers business advisory services such as auditing, accounting, taxation, strategy
management, and human resource consulting services. The company's headquarters is
based in London, United Kingdom, and is known as the second-largest professional
services firm and has its name amongst the Big Four Auditors.

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It has about 275,000 employees working worldwide. PwC has a network of firms in
158 countries, at 743 locations. It has 28 offices in India in 13 cities employing over
30000 professionals.
EY (Ernst & Young)
Ernst and Young is a globally recognized multinational professional service company

based in the United Kingdom. It is one of the largest professional services firms
globally and is one of the "Big Four" accounting firms.
It was founded in 1989. EY has its headquarters in London, United Kingdom. The
company generated $37.2Billion in 2020 and has a working staff of 290,000 across the
world with 700 offices in 150 countries. EY has a pan Indian presence with offices in
many Indian cities.
5. Business Strategy Frameworks
Frameworks are useful tools that help you analyze the issue, structure your thinking
and communicate recommendations. Business frameworks can help you articulate
goals with strong business writing and develop a blueprint for success. You can take a
broader conceptual framework and scale it to fit your needs. A business framework
also gives you a starting place and a common vocabulary that you can edit to fit your
client's goals.
In this compendium, we will look at eight business strategy frameworks for consulting:
5.1 SWOT Analysis
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is an

analytical framework that can help your company face its greatest challenges and find

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its most promising new markets. SWOT analyses are often used during strategic
planning. They can serve as a precursor to any company activities, such as exploring
new initiatives, making decisions about new policies, identifying possible areas for
change, or refining and redirecting efforts mid- plan.
The components of SWOT analysis are:
Strengths: These detail the strengths that an organization possesses that gives it an
advantage over others.
Weaknesses: The shortcomings that an organization possesses that the other players in
the industry might exploit.
Opportunities: Events or changes in the external environment that an organization
could use to its advantage.
Opportunities: Events or changes in the external environment that an organization

could use to its advantage.
Threats: Events or changes in the external environment that can cause the organization
to lose its competitive advantage.
(PRO-TIP: Try doing a SWOT analysis of your existing organization or, if you're a
fresher, then of your dream company. This can be asked during your interviews)

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5.2 BCG Matrix
The Boston Consulting group's product portfolio matrix (BCG matrix) is designed to
help with long-term strategic planning, help a business consider growth opportunities by
reviewing its portfolio of products to decide where to invest, discontinue, or develop
products. It is also known as the Growth/Share Matrix
The Matrix is divided into four quadrants based on an analysis of market growth and
relative market share, as shown in the diagram below.
Dogs: These are products with low growth or market share.
Question marks or Problem Child: Products in high growth markets with low market
share.
Stars: Products in high growth markets with high market share
Cash Cows: Products in low growth markets with a high market share
5.3 PEST Analysis
PEST helps you understand the broader Political, Economic, Socio-Cultural, and
Technological environment in which you operate. PEST is a helpful tool when you are
beginning operations in a new country or region. We use the prompts of PEST to
brainstorm relevant factors. Next, we identify information that applies to these factors
and then we draw conclusions.

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PEST analysis helps in making strategic business decisions, planning marketing

activities, product development and research.
Things that get covered under each factor of PEST analysis are:
5.4 Porter’s 5 Forces
Porter's Five Forces is a simple but powerful tool for understanding the
competitiveness of your business environment, and for identifying your strategy's
potential profitability. This helps us in understanding the forces in our environment or
industry that can affect our profitability, according to which we can adjust our strategy.
In an existing industry, market entry and survival are determined by various forces that
prevail in the industry. The main five factors or forces that drive competition are:
• Competitors or Rival Firms: This looks at the number and strength of your
competitors. The existing rivalry between firms can take a firm’s profits to zero
and may lead to shut down. In a competitive environment, a firm’s decision is
highly influenced by what the competitors do.
• Threat of New Entrants: The threat of new entrants to the market determines
the sustainability of the estimated market share. It is evaluated in terms of
market entry barriers which may be in the form of high fixed cost, product
differentiation etc. Your position can be affected by people's ability to enter your
market. So, think about how easily this could be done.
• Threat of Substitutes: There is always a threat of substitute products replacing
the existing product(s) of a firm. A substitution that is easy and cheap to make
can weaken your position and threaten your profitability.
• Suppliers: This is determined by how easy it is for your suppliers to increase

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their prices. How many potential suppliers do you have? How unique is the
product or service that they provide, and how expensive would it be to switch
from one supplier to another? A competitive market with limited suppliers
brings with it a high level of bargaining power of suppliers.
•
• Buyers: Here, you ask yourself how easy it is for buyers to drive your prices
down. How many buyers are there, and how big are their orders? How much
would it cost them to switch from your products and services to those of a rival?
Are your buyers strong enough to dictate terms to you? Multiple products of the
same category give the buyers an advantage in bargaining, thus the high
bargaining power of buyers exists in multi-brand products.
5.5 CAGE Distance Framework
The CAGE Distance Framework is a tool that can be used to uncover important
differences between various countries that companies should take into account when
deciding on their strategy. The acronym CAGE stands for Culture, Administrative,
Geographical, and Economic. The CAGE Distance Framework helps companies
because it can evaluate countries and determine the distance between them. This does
not only involve physical geographical distance, but also figurative distances between
various cultures, economies, and working methods.
The cultural differences found in a CAGE Distance framework include:
• Different languages and dialects

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• Different ethnicities and networks

• Different belief systems and religions
• Different online behaviour such as social networks or search engines
• Different values and social norms
• Different attitudes on issues
The administrative differences found in a CAGE Distance framework include:
• Colonial ties
• Trade agreements & policies
• Currency differences
• Political situation
The geographic differences found in a CAGE Distance framework include:
• Physical distance between home country and new market country

• Border structure (land or sea)
• Timezone differences
• Physical size of country and location of major cities
• Transport and communication ease
The economic differences in a CAGE Distance framework include:

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• Country resources
• Rich and poor social divides
• Infrastructure
• Average income levels and country wealth
5.6 VRIO Framework
The VRIO framework is an internal analysis tool, used by organizations to categorize

their resources based on whether they hold certain traits outlined in the framework. This
categorization then allows organizations to identify the company resources that are
competitive advantages.
There are four dimensions that make up the framework, which create the acronym
VRIO: Valuable, Rare, Inimitable, Organized
Valuable: When a resource is valuable, it's providing the organization with some sort of
benefit. However, a resource that is valuable and doesn't fit into any of the other
dimensions of the framework, is not a competitive advantage. An organization can only
achieve competitive parity with a resource that is valuable and neither rare nor hard to
imitate.
Rare: A resource that is uncommon and not possessed by most organizations is rare.
When a resource is both valuable and rare, you have a resource that gives you a
competitive advantage. The competitive advantage achieved from a resource that is both
valuable and rare is usually short lived though. Competitors will quickly realize and can
imitate the resource without too much trouble. Therefore, it's only a temporary
competitive advantage.

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Inimitable: Resources are hard to imitate if they are extremely expensive for another
organization to acquire them. A resource may also be hard for an organization to imitate
if it's protected by legal means, such as patents or trademarks.
Resources are considered a competitive advantage if they're valuable, rare, and hard to
imitate. However, organizations that aren't organized to fully take advantage of the
resource, may mean the resource is an unused competitive advantage.
Organized to capture value: An organization's resource is organized to capture value

only if it is supported by the processes, structure, and culture of the company. A
resource that is valuable, rare, hard to imitate, and organized to capture value is a long-
term competitive advantage.
A resource cannot confer any advantage for a company if it’s not organized to capture
the value. Only a firm that is capable to exploit valuable, rare, and imitable resources
can achieve sustained competitive advantage.
5.7 McKinsey’s 7S Model
The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational

design.” The goal of the model is to depict how effectiveness can be achieved in an
organization through the interactions of seven key elements – Structure, Strategy, Skill,
System, Shared Values, Style, and Staff.
The focus of the McKinsey 7s Model lies in the interconnectedness of the elements that
are categorized by “Soft Ss” and “Hard Ss” – implying that a domino effect exists when
changing one element in order to maintain an effective balance.
The model can be applied to many situations and is a valuable tool when organizational
design is at question. The most common uses of the framework are:
• To facilitate organizational change
• To help implement new strategy
• To identify how each area may change in a future
• To facilitate the merger of organizations
Structure: Structure is the way in which a company is organized – chain of command

and accountability relationships that form its organizational chart.
Strategy: Strategy refers to a well-curated business plan that allows the company to
formulate a plan of action to achieve a sustainable competitive advantage, reinforced by
the company’s mission and values.

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Systems: Systems entail the business and technical infrastructure of the company that
establishes workflows and the chain of decision-making.
Skills: Skills form the capabilities and competencies of a company that enables its
employees to achieve its objectives.
Style: The attitude of senior employees in a company establishes a code of conduct

through their ways of interactions and symbolic decision-making, which forms the
management style of its leaders.
Staff: Staff involves talent management and all human resources related to company
decisions, such as training, recruiting, and rewards systems
Shared Values: The mission, objectives, and values form the foundation of every
organization and play an important role in aligning all key elements to maintain an
effective organizational design.
5.8 3Cs Model: Corporation, Competition, and Customer
The primary goal should be the interest of the customer and not those of the
shareholders because a company that is genuinely interested in its customers will
automatically take care of shareholder interests, as well as they need a full
understanding of who the competition is, and what that competition is capable of doing.
If a company can bring together those 3 C’s successfully in the strategy, they should be
able to find the way into the right part of the market.

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Customers: The customers have needs and want and the company understands the
requirements of the customers. The company should be able to understand, meet, and
cater to the needs and demands of the customers rather than of the shareholders of the
company.
Competitors: The business needs to conduct a thorough competitive analysis in the

market figuring out that who are the direct competitors and who are the indirect
competitors. Finding out their core strengths, business strategies, values, objectives,
sales strategies, marketing strategies, and other such crucial facets is important to work
out the plan to beat the competition and gain the advantage.
Corporation: The company should be genuinely interested in the customers as doing

the same will automatically take care of the shareholders, profits, sales, and other
crucial objectives of the business. The customer should always be at the focal point of
every business aspect.
6. Guesstimates
Guesstimate is one of the most common strategies and consulting interview questions.
It tests the candidate's strategic approach how he/she could solve an unquantifiable
problem and come up with a quantifiable answer
How to approach Guesstimates:
Approach any guesstimate question in 4 steps:
Clarity: Understand the situations, extract all information required to continue with
your estimation. Come up with possible sets of assumptions you will be taking to reach

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to the conclusion.
Structure: Use MECE to structure your analysis effectively. Device a logical approach
for your estimation. You can use top-down, bottom-up, process mapping (production,
consumption side approach), layout centric or critical comparison to reach a number.
Analyze: Decide the approach you want to proceed with. Think of 3-4 steps ahead of
your approach. This is the most important part of a guesstimate as it tests your logical
thinking.
Conclude: Leverage your assumptions and approach to reach a conclusion.
6.1 MECE Framework
MECE stands for Mutually Exclusive Collectively Exhaustive segmentation. The

contents of segments should not overlap with one another. All the statements taken
together should be able to give the overall idea.
Although there are many approaches you can take, we are discussing two main
approaches to proceed with guestimates
Top-down Approach- In this approach, we start with bigger population size and keep
on segmenting until we reach a conclusion. The segmentation can be done based on
(depending on the case):
1. Geography (Rural, semi-urban, urban)

2. Gender (Male, Female)
3. Age
4. Income
5. Profession
6. Preferences (Choice of brands, lifestyles etc.)
7. Time of day (Morning, Evening, Day, Night etc.)

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Depending on the case, we have to opt the appropriate segmentation method.
Bottom-up Approach- In this approach, we start with a low-level block and logically
extrapolate the results based on assumptions and trends and move up to the answer. If
we scale up correctly, we can get a better result from this approach.
Q) Find out the number of Shaving Razor users in India.
Using top-down approach:
Starting with the total population of India = 1.3 billion
Gender-wise bifurcation = Males (60%) & Females (40%) => Males = 0.78 billion
Age-wise segmentation in Males (18+) 75% of total males in India = 0.585 billion
Preference segmentation (those who trims vs those who shaves) (Assuming 30% trims
and 70% shaves) => 0.4095 million
Hence, we can reach the conclusion that there are ~0.4 million or ~4 lakhs shaving users
in India.
7. Some Interview Questions

SWOT Matrix:
• Perform a SWOT analysis of Flipkart?

• Or what are the strengths and Weaknesses of Patanjali?
• The candidates are advised to prepare for such questions in advance, i.e., to
practice SWOT analysis of few top companies of India and the world.
BCG Matrix:
• BCG Analysis of Amazon?

• As Amazon into a lot of business segments, the product portfolio is huge. The
candidates should clearly describe the four elements in BCG matrix Stars, Cash
Cows, Question marks, and Dogs for a given company.
(The candidates must be clear about why they put certain products or services in a
particular BCG matrix bracket.)

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Porter's Five Forces:
• A candidate is usually given the name of an established company like HUL,

Apple etc.
• Then they are asked how Porter's five forces influence in the decision-making of
these companies?
• How can these companies' competitors use Porter's five forces theory to gain
market share?
• How easy or difficult for a new entrant to enter a given market and why?
PEST Analysis:
• XYZ Solutions, an IT company is planning to open its branch in the US.

• What trading policies impact business?
• What regulations must you follow, and have they changed in the last 5, 10, 20
years?
• How much does globalization affect your market share?
• What taxes must you follow, and how does it affect your service offerings (if at
all)?
• Is the population demographic growing or slowing down and if so, how is it
affecting your business?
• What technology is critical for your day-to-day operations?
• What new technology is available that could streamline decision-making and
product development?
• Do you depend on 3rd parties for any tech support or solutions?
Guesstimates:
• How many silver cars are there in New Delhi?

• What is the number of Two-wheelers in your district?
• What is the number of smartphones in your home state?
• How many drinking water bottles (1 liter) are sold in Mumbai per day?
• How many people are there in Statue of Liberty right now?
• How many iphones phones are currently being used in India?
• How many masks were sold in the month of december 2021?
• How many trees are there in Delhi?
• How many cups of Tea were consumed in Mumbai last month?
• How many Cars are there in Hyderabad?
• What is the size of Laptop market in India?
• How many Tennis balls can fit in a Bus?

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• How many Refrigerators are sold in India every year?

• How many School teachers are there in Hyderabad?
• Estimate the volume of a plane (Boeing 747)
• Estimate the size of the diaper market in India
• Estimate the total number of ATMs in India
• Estimate the number of hours spent on smartphones by all Indians in a day.
• Estimated the monthly revenue of a hair salon
• How many volleyballs can you place inside the room we are in?
• How many weddings are held in India each day?
• How many people fly in and out of Mumbai Airport every day?

Consulting
and Strategy
Consulting
Consulting is the process of providing expertise to businesses and organizations to solve typical and most
pressing business problems related to domains such as growth, strategy, operational excellence, etc. The true
meaning of consulting is helping people solve problems and move from their current state to their desired
state. Consulting is more than just giving advice. It involves a hierarchy of purpose:
1. Providing information to a client.

2. Solving a client's problems.
3. Making a diagnosis, which may necessitate the redefinition of the problem.
4. Making recommendations based on the diagnosis.
5. Assisting with the implementation of recommended solutions.
6. Building a consensus and commitment around corrective action.
7. Facilitating client learning-teaching clients how to resolve similar problems in the future.
8. Permanently improving organizational effectiveness.
Types of Consultants
The consultancy industry is one of the most diverse markets and given the widespread area in which a
consultant can work. There are a wide spectrum of types of consultants found in the industry.
1. Strategy Consultant - The term Strategy Consulting is used to describe consultants who operate at the
highest level of the consultancy market, focusing on strategic topics like corporate and organizational
strategy, economic policy, government policy, and functional strategy. Their focus lies more on
quantitative/analytics skills, and their job description revolves more around advising and overseeing
implementation.
2. Operations Consultant - Operations consultants are consultants who help clients improve the performance
of their operations. Consultancy activities in this segment vary from advisory services to hands-on
implementation support for primary functions (e.g., Sales, Marketing, Production, etc.) and secondary
purposes (e.g., Finance, HR, Supply Chain, ICT, Legal, etc.).
3. Financial Advisory Consultant - This segment generally works on questions that address financial
capabilities and, in many cases, the analytical capabilities within an organization. A financial consultant
often works with a company's CFO or the strategic consultant to help the business align its financial goals
(e.g., overhead costs, return on investments, profit margins, etc.) with strategic goals.
4. Human Resources Consultant - HR consultants help clients with human capital challenges within their
organizations and improve the HR department's performance. Chief topics central to HR consultants' job
descriptions are organizational changes, change management, terms of employment, learning &
development, talent management, and retirement.
5. IT Consultant - Technology consultants, also known as IT, ICT, or digital consultants, focus on helping clients
with the development and application of Information Technology (IT) within their organization. IT consultants
focus on transitions (projects) in the ICT landscape, contrary to regular IT employees, who work on day-to-day
IT operations (so-called 'business as usual’ activities).
Strategy
Business (or Strategic) management is the art, science, and craft of formulating, implementing, and
evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives. A
business strategy must take into account a number of factors including the market, competitors, and the
business environment, as well as the company's structure, strengths and weaknesses. It is the process of
specifying the organization's mission, vision, and objectives. It involves developing policies and plans, often in
terms of projects and programs, which are designed to achieve these objectives, and then allocating
resources to implement the policies and plans, projects, and programs. Strategic management seeks to
coordinate and integrate the activities of various functional areas of a business in order to achieve long-term
organizational objectives.
Important Concepts in Consulting and Strategy
BCG Growth share MatrixIt is a portfolio planning tool developed by Bruce H. Henderson for the Boston
consulting group in 1970. BCG matrix is used to determine what priority should be given to a product in a
product portfolio of business. The BCG matrix has two dimensions called market growth and market share. To
sustain in the market and create long term value, it is necessary that companies have products which are in
high growth segments as well as which produce a lot of cash for the company.
Products can be placed in 4 categories in the BCG matrix.

1. Stars (high growth, high market share) - Generates large
amounts of cash due to their leadership in business but also
consumes a lot of cash. Every effort should be made to hold
shares as rewards will be great when the growth rate declines,
and it turns into a cash cow.
2. Cash Cows (low growth, high market share) - High cash and
profit generation due to huge market share. Least investments are
required to sustain; Foundation of any company.
3. Dogs: (low market share as well as growth rate) - Milk them as

long as you can without any further investment. Avoid any big
turnaround plan for the product; if the product is not generating
cash, liquidate them.
4. Question marks (high growth, low market share) - High demand but low return due to low market share.
Absorb a lot of cash to if steps are not taken increase the market share and later turns into a dog. Either invest
heavily to shift them to star category or sell off or invest nothing and generate whatever cash can be
generated.
PESTLE Analysis
PESTLE analysis is used as a tool by companies to track the environment they’re operating in or are planning
to launch a new project/product/service etc. PESTLE is a mnemonic which in its expanded form denotes P for
Political, E for Economic, S for Social, T for Technological, L for Legal and E for Environmental. It gives a bird’s
eye view of the whole environment from many different angles that one wants to check and keep a track of
while contemplating on a certain idea/plan. It is very critical for one to understand the complete depth of
each of the letters of the PESTLE. It is as below:
Political: These factors determine the extent to which a government may influence the economy or a certain
industry. For example, a government may impose a new tax or duty due to which entire revenue generating
structures of organizations might change. Political factors include tax policies, Fiscal policy, trade tariffs etc.
that a government may levy around the fiscal year, and it may affect the business environment (economic
environment) to a great extent.
Economic: These factors are determinants of an economy’s performance that directly impacts a company
and have resonating long term effects. For example, a rise in the inflation rate of any economy would affect
the way companies’ price their products and services. Adding to that, it would affect the purchasing power
of a consumer and changing demand/supply models for that economy. Economic factors include inflation
rate, interest rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI
(foreign direct investment) depending on certain specific industries who’re undergoing this analysis.
Social: These factors scrutinize the social environment of the market, and gauge determinants like cultural
trends, demographics, population analytics etc. An example for this can be buying trends for Western
countries like the US where there is high demand during the Holiday season.
Technological: These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably. This refers to automation, research and development and
the amount of technological awareness that a market possesses.
Legal: These factors have both external and internal sides. There are certain laws that affect the business
environment in a certain country while there are certain policies that companies maintain for themselves.
Legal analysis considers both of these angles and then charts out the strategies in light of these legislation. For
example, consumer laws, safety standards, labor laws etc.
Environmental: These factors include all those that influence or are determined by the surrounding
environment. This aspect of the PESTLE is crucial for certain industries particularly for example tourism, farming,
agriculture etc. Factors of a business environmental analysis include but are not limited to climate, weather,
geographical location, global changes in climate, environmental offsets etc.
SWOT Analysis
SWOT analysis using SWOT diagrams or matrices is a key part of any business planning or analysis. SWOT stands
for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors and
opportunities, and threats are external factors. A SWOT diagram analyzes a project or business venture by
focusing on each of these factors. It typically consists of four boxes, one for each area, but the exact shape
may vary depending on the design.
SWOT diagrams can be especially useful when trying to decide whether or not to embark on a certain
venture or strategy by visualizing the pros and cons. By clearly outlining all positives and negatives of a
project, SWOT analysis makes it easier to decide whether or not to move forward.
• Strengths: characteristics of the business or project that give it an advantage over others.
• Weaknesses: characteristics of the business that place the business or project at a disadvantage relative to
others.
• Opportunities: elements in the environment that the business or project could exploit to its advantage.
• Threats: elements in the environment that could cause trouble for the business or project.
1. Competitive Rivalry: This looks at the number and strength of your competitors. How many rivals do you
have? Who are they, and how does the quality of their products and services compare with yours? Where
rivalry is intense, companies can attract customers with aggressive price cuts and high-impact marketing
campaigns. Also, in markets with lots of rivals, your suppliers and buyers can go elsewhere if they feel that
they're not getting a good deal from you. On the other hand, where competitive rivalry is minimal, and no
one else is doing what you do, then you'll likely have tremendous strength and healthy profits.
2. Supplier Power: This is determined by how easy it is for your suppliers to increase their prices. How many
potential suppliers? How unique is the product or service that they provide, and how expensive would it be
to switch from one supplier to another? The more you have to choose from, the easier it will be to switch to a
cheaper alternative. But the fewer suppliers there are, and the more you need their help, the stronger their
position and their ability to charge you more. That can impact your profit.
3. Buyer Power: Here, you ask yourself how easy it is for buyers to drive your prices down. How many buyers
are there, and how big are their orders? How much would it cost them to switch from your products and
services to those of a rival? Are your buyers strong enough to dictate terms to you? When you deal with only
a few savvy customers, they have more power, but your power increases if you have many customers.
4. Threat of Substitution: This refers to the likelihood of your customers finding a different way of doing what you
do. For example, if you supply a unique software product that automates an important process, people may
substitute it by doing the process manually or by outsourcing it. A substitution that is easy and cheap to make
can weaken your position and threaten your profitability.
5. Threat of New Entry: Your position can be affected by people's ability to enter your market. So, think about
how easily this could be done. How easy is it to get a foothold in your industry or market? How much would it
cost, and how tightly is your sector regulated? If it takes little money and effort to enter your market and
compete effectively, or if you have little protection for your key technologies, then rivals can quickly enter
your market and weaken your position. If you have strong and durable barriers to entry, then you can
preserve a favorable position and take fair advantage of it.
The 3 Cs
The 3C model is one of the most basic strategy models that is used for analyzing intrinsic and extrinsic factors
to develop sustainable solutions. The 3Cs are:
Customers- This is a very important segment as nowadays customers’ needs and wants are constantly
evolving and business must evolve with them.By analyzing the customers, an organization will be able to
cater them and realize a competitive advantage.
Corporation-Analyzing the client's corporations is a crucial part. Knowing their strengths and weaknesses can
help in deriving a better solution to their problems.
Competition- Your competitors are one of the largest pressures that your company faces when trying to
maximize profits. They are the reason why you can’t exercise monopoly pricing strategies and are forced to
reinvest into R&D efforts.Companies constantly flow in and out of the market, so it is crucial to consistently
conduct environmental scans.
MCkinsey 7S
The McKinsey 7S Framework is an excellent tool to help you find and fix internal organizational problems.
McKinsey 7S Framework is a strategic planning tool designed to help an organization understand if it is set up
in a way that allows it to achieve its objectives. It is used for:
● Organizational change
● Mergers and acquisitions
● Implementation of a new strategy
● Understanding the weaknesses (blind spots) of an organization
Resources and Capabilities

Analyzing the Resources: the VRIO Framework VRIO is a business analysis framework that forms part of the
firm's larger strategic scheme. The basic strategic process that any firm goes through begins with a vision
statement, and continues on through objectives, internal & external analysis, strategic choices (both
business-level and corporate-level), and strategic implementation. The firm will hope that this process results
in a competitive advantage in the marketplace they operate in.
The Question of Value: "Is the firm able to exploit an opportunity or neutralize an external threat with the
resource/capability?"
The Question of Rarity: "Is control of the resource/capability in the hands of a relative few?"
The Question of Imitability: "Is it difficult to imitate, and will there be a significant cost disadvantage to a firm
trying to obtain, develop, or duplicate the resource/capability?"
The Question of Organization: "Is the firm organized, ready, and able to exploit the resource/capability?" "Is
the firm organized to capture value?
Value Chain Analysis

Value is the total amount (i.e., total revenue) that buyers are willing to pay for a firm's product. The difference
between the total value and the total cost performing all of the firm's activities provides the margin. Margin
implies that organizations realize a profit margin that depends on their ability to manage the linkages
between all activities in the value chain. In other words, the organization is able to deliver a product / service
for which the customer is willing to pay more than the sum of the costs of all activities in the value chain. A
value chain concentrates on the activities starting with raw materials till the conversion into final goods or
services. The sources of the competitive advantage of a firm can be seen from its discrete activities and how
they interact with one another. The ultimate goals in performing value chain analysis are to maximize value
creation while also monitoring and minimizing costs.
Primary Activities:
Primary activities are directly concerned with creating and delivering a product. They can be grouped into
five main areas: inbound logistics, operations, outbound logistics, marketing and sales, and service.
Support Activities:
Support activities assist the primary activities in helping the organization achieve its competitive advantage.
There are four main areas of support activities: procurement, technology development (including R&D),
human resource management, and infrastructure (systems for planning, finance, quality, information
management etc.). They include:
Competitive Advantage and Innovation

Competitive advantage is a condition or circumstance that puts a company in a favorable or superior
business position. To gain and maintain a competitive advantage, an organization must be able to
demonstrate a greater comparative or differential value than its competitors and convey that information to
its desired target market. For example, if a company advertises a product for a price that's lower than a similar
product from a competitor, that company is likely to have a competitive advantage. The same is true if the
advertised product costs more but offers unique features that customers are willing to pay for.
Porter's techniques for creating superior performance (Generic Competitive Strategies):

Cost leadership strategy - Should the product or service be offered at a lower price than the competitors’?
Differentiation strategy - Should the product or service have unique features or benefits that are so appealing
that customers are willing to pay a premium price?
Focus strategy - Should the product or service target niche markets that are overlooked or underserved by
competitors?
MECE Model
The MECE model is used by consulting firms to describe a way of organizing information. The ECE principle
suggests that to understand and fix any large problem, you need to understand your options by sorting them
into categories that are: Mutually Exclusive– Items can only fit into one category at a time and Collectively
Exhaustive – All items can fit into one of the categories.
Guesstimates no-1
Estimate the number of cups of tea that is consumed in Mumbai in a month? As a primary step, assume that
every day of the week is being thought about equally. Tea consumption would possibly lower throughout the
weekend as individuals don’t go to the workplace. We will go along with the primary assumption.
The population of Mumbai can be roughly estimated to be about 2 crores. 20% of These inhabitants are
assumed to be youngsters who don’t drink tea. One other assumption is that of the remaining inhabitants,
20% are ordinary drinkers, 30% are common drinkers, 20% are occasional drinkers, and 10% are non-drinkers.
The ordinary drinkers could also be mentioned to have three cups of tea in a day. Common drinkers could
also be mentioned to have one cup of tea in a day. The tea consumption of event drinkers possibly would be
a cup per week, and that of non-drinkers none in any respect.
Calculating proportions
Recurring – 3 x 0.2 x 7 = 4.2
Common – 1 x 0.3 x 7 = 2.1
Occasional – 1 x 0.2 x 1 = 0.2
Non – 0
Whole = 6.5
Whole cups per week = 6.5 x 1.6 crore = 10.4 crore
Guesstimates no-2
How many garden hoses were sold in the US last year? The population of the US is 300 million people. The
average US household is made up of 3 people, so we are talking about 100 million households. I’m going to
estimate that 50 percent of the households are either suburban or rural. That makes 50 million households. I’ll
also assume that 20 percent of those homes are apartments or condos. That narrows us down to 40 million
houses that most likely use a garden hose. Garden hoses are relatively inexpensive, so people are likely to
have a hose in the front and a hose in the backyard. That makes 80 million hoses. I want to add in another 10
million hoses, which can be found in nurseries, zoos, and other outdoor facilities. Most of those businesses
have at least two hoses. We are now up to 90 million garden hoses. Hoses aren’t replaced every year. I’d say
that they are replaced every 3 years unless they are run over by a lawn mower or get torn by a pet dog. So,
we take 90 million hoses, divide that number by 3 and come up with 30 million garden hoses sold each year
Interview Kit by IIM Tiruchirappalli |Page | 12
What is Consulting?
Consulting is the business of offering advice and expertise to an organization with the object
of helping them improve its business performance in terms of its overall profitability,
operations, and management structure. The demand for consultants by businesses or other
organizations has resulted in the emergence of consulting as one central domain and a
sought-after career option.
Management consultants help businesses improve their performance and grow by solving
problems and finding new and better ways of doing things. If you're interested in how a
business works – its strategy, structure, management, and operations – a career in
management consultancy might be for you. You will be able to:
▪ Rapidly Gain Exposure to Industries: You'll gain experience by working on projects in

various industries and with different clients and seeing how your decisions affect them.
▪ Help Make Big-Picture Decisions: You'll help guide your clients in making significant
decisions that will affect their business.
▪ Continuously learn: You'll be working on projects that require you to learn and adapt to
new trends in the industry continuously.
▪ Work in a team environment: You'll have the chance to collaborate with people in your
organization and clients with similar interests and expertise.
Consultants are hired for a variety of reasons. There are three fundamental reasons why
people seek professional advice:
1. They need help to figure it out or get to the state they want on their own.
2. They have a rough concept of where they want to go, but they want to get there as
soon as possible.
3. They want to save time and effort by using a tried-and-true method. Giving guidance
is only one aspect of consulting.
It entails a hierarchy of goals:

• Giving information to a customer.
• Dealing with a client's issues.
• Obtaining a diagnosis, which may necessitate redefining the issue.
• Making suggestions based on the findings.
• Assisting with the implementation of solutions that have been recommended.
• Creating buy-in and commitment to corrective action.
• Assisting clients in their learning.

What’s in it for you?
Continous
Client facing Steep learning
growth
roles curve
opportunities
Building Exposure to
professional Variety in work different
network industries
Skills needed to be a consultant.

• Ability to multitask.
• Ability to work in teams.
• Willingness to work long hours.
• Travel enthusiast.
• Great Academics.
What is Strategy in Consulting?

A strategy is any manager’s action to attain a pre-established organizational goal. It focuses
on creating a unique value proposition that helps the organization attain a strategic
position. It emerges from three distinct sources:
• Serving few needs of many customers
• Serving broad needs of a few customers
• Serving broad needs of many customers in a narrow market
Core Strategy Tools
SWOT Analysis
A structured planning method is used to evaluate the strengths, weaknesses,
opportunities, and threats involved in a project or in a business venture.
▪ Strengths: Characteristics of the business or project that give it an advantage over others.
▪ Weaknesses: Characteristics that place the business or project at a setback relative to

other companies.
▪ Opportunities: Elements that the business or project could exploit to its advantage.
▪ Threats: Environmental elements that could cause trouble for the

business or project.

PESTLE Analysis
PESTLE Analysis is used for analyzing the environment in which a business operates.
• Political: Determines the extent to which a government influence the economy of

any industry.
• Economic: Factors in the economy that affect the organization.
• Social: Factors scrutinizing the social environment of the market and gauging
determinants like cultural trends, demographics, and others.
• Technological: Factors pertain to innovations in technology that may
affect the operations of the industry and the market.
• Legal: Laws affecting the business environment.
• Environmental: Factors include all those that influence or are determined by the
surrounding environment.

BCG Matrix
A matrix developed by Boston Consulting Group in the early 1960s is used to plan market
strategies. The growth rate is determined by reference to market research, or it can be
estimated. "Competitive position" includes an assessment of the firm's overall market
penetration and profitability compared to the other players in that market. Products are
then positioned in the four cells, as shown in the figure.
• Cash Cows: Large Market Share in a mature industry. It requires little investment.
• Star: Larger Market Share in a growing industry. It may require investment to
maintain a lead.
• Question Marks: Small Market Share in a growing market requires
focus and resources.
• Dog: Small Market Share in a Mature industry. Little prospect for gain.
McKinsey 7s
The McKinsey 7S Framework is an excellent tool to help you find and fix internal
organizational problems. McKinsey 7S Framework is a strategic planning tool designed to
help an organization understand if it is set up in a way that allows it to achieve its objectives.
Before the advent of the 7S Model, managers tended to focus on structure and strategy
when they thought about organisational design. They thought about who was responsible
for what, who reported to whom, how many layers of management there should be, and
how to beat the competition.
It is used for:
• Organizational change
• Mergers and acquisitions
• Implementation of a new strategy
• Understanding the weaknesses (blind spots) of an organization

MECE (Mutually Exclusive, Collectively Exhaustive)
MECE is a system of problem-solving that help solves complex problems. It can help
streamline activities and focus on critical data that determine success. Used by management
consulting firms to describe a way of organizing information. The MECE principle suggests
that to understand and fix any large problem, you need to understand your options by
sorting them into categories: Mutually Exclusive – Items can only fit into one category at a
time and Collectively Exhaustive – All items can fit into one of the categories.
Porter's 5 forces
Porter's is a valuable tool in helping understand both the power of current competitive
position and the planned position.
Porter's five forces are:

1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. The threat of substitute products
Key takeaways from Porter's
• Porter's Five Forces is a framework for analysing a company's competitive

environment.
• The number and power of a company's competitive rivals, potential new market
entrants, suppliers, customers, and substitute products influence a company's
profitability.
• Five Forces analysis can guide business strategy to increase competitive advantage.
Bain's elements of value
Product and service value is delivered in four ways: functional, emotional, life-changing, and
social impact. Generally, the more elements offered, the stronger the client loyalty and the
company's long-term revenue development.

Which tool or framework to use?
A business framework can be used to analyse and guide decisions for your client and your
own business. For example, the 3C Model can help you develop a competitive strategy for
your client or can be applied to develop a social media marketing plan for your brand. There
is no one best framework, and often you use multiple frameworks in your client's work.
Frameworks save you time by providing a starting point for information gathering and
analysis but remember that the most powerful framework you have is your expertise and
common sense. These tools are timesavers, but your business insight will ultimately deliver
value to your client.
About Consulate club
The consulate club is a student-driven initiative with a core community of passionate

management students with diverse experience who work to offer the students a platform to
develop an interest and inclination towards the fields of strategy and consulting at IIM
Trichy.
What do we offer?
• Conduct workshops on how to approach case study competitions

• Provide industry exposure through guest lectures
• Provide industry updates to keep the community up to date with recent happenings
• We conduct competitions throughout the academic year to help you hone skills like
thinking strategically, research, data analysis, and presentation.

CONSULTING
CONSULTING AND STRATEGY CLUB

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LinkedIn: https://in.linkedin.com/in/consult-club-
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Page | 12
CONSULTING - AN INTRODUCTION
Consulting is the branch of management that deals in providing expertise to businesses and
organizations to solve typical problems related to domains such as growth, strategy,
operational excellence, etc. Consulting means “engaged in the business of giving expert
advice to people working in a specific field.” In other words, a consultant is somebody who
gives advice to a specific group of people. The true meaning of consulting is helping
people solve problems and move from their current state to their desired state.
There are three main reasons people decide to bring in outside advice:
They are simply unable to figure it out or get to their desired state on their own.
They have a general idea, but they want to get there faster.
They want to save time and effort by following an efficient, proven system.
The three main categories of consulting:
Management Consulting: It is what most people think of when someone says “consulting.”
This field is dominated by large firms like McKinsey & Co., Bain & Co., and Boston
Consulting Group, which are hired to help enterprise businesses improve strategy and
operations or manage significant business events like mergers and acquisitions.
Corporate Consulting: Category of corporate consulting covers a massive spectrum of job
descriptions and focuses. This is a catch-all category that includes in-house consulting
services, implementation teams, B2B consulting businesses, and a host of other things.
Independent Consulting: Done by professionals who have developed expertise in an area,
they choose to build and run their own business around that knowledge rather than
continuing as an employee.
Consulting as a Career: You will develop business acumen over a multitude of industries by
solving the most pressing and complex problems faced by companies. The learning curve is very
steep since you work with the best of the best and interact with top management very often. It
helps build a structured thought process and superior analytic mindset. (Prepare a why
consulting answer based on your goals.)
Consulting firms: McKinsey & Co., Boston Consulting Group, Bain & Co, Kearney, Mastercard
Advisors, KPMG, EY, Deloitte, PricewaterhouseCoopers.
What is Strategy:
Strategy is a set of goal-directed actions a firm takes to gain and sustain superior performance
relative to competitors. A good strategy consists of 3 elements:
A diagnosis of the competitive challenge
A guiding policy to address the competitive challenge
A set of coherent actions to implement the firm’s guiding policy.
Page | 13
What is competitive advantage?
Competitive advantage is always relative, not absolute. To assess competitive advantage, we
compare firm performance to a benchmark — that is, either the performance of other firms in
the same industry or an industry average.
A firm that achieves superior performance relative to other competitors in the same industry
or the industry average has a competitive advantage.
Strategy is about creating superior value, while containing the cost to create it. Managers
achieve this combination of value and cost through strategic positioning. That is, they stake
out a unique position within an industry that allows the firm to provide value to customers,
while controlling costs. The greater the difference between value creation and cost, the
greater the firm’s economic contribution and the more likely it will gain competitive
advantage.
Sustainable competitive advantage: A firm that is able to outperform its competitors or
the industry average over a prolonged period of time.
Competitive disadvantage: Under performance relative to other competitors in the same
industry or the industry average.
Competitive parity: Situation when two or more firms perform at the same level.
Problems solved by a Consultant:

Guesstimates: Consultants are required to make educated estimates about the size of a
problem or impact of a strategy, using their logical ability, general knowledge and problem
specific learnings (garnered through extensive research and asking good questions).
Profitability: Case, wherein, the client is facing an unexpected drop in profits in the recent
past.
Frameworks/Techniques -
Identifying revenue sources and cost centers
Systematic analysis of revenue and cost levers
Competitor benchmarking
Value chain analyses
Market Entry: Case, wherein, the client requires assistance or advice in deciding whether to
make an investment in a new market.
PESTEL analysis
SWOT analysis
Porter’s 5 forces
Quantitative estimation of market attractiveness
Mergers and Acquisitions: Case, wherein, the client seeks advice on whether to execute a
strategic merger or acquisition.
Estimate standalone value of the firm to be acquired
Analyse revenue and cost synergies arising due to the merger/acquisition
Study the capabilities of the acquiring firm to execute the merger/acquisition
Page | 14
PESTEL Framework: The PESTEL model groups the factors in the firm’s general environment
into six segments and provides a way to scan, monitor, and evaluate the important external
factors and trends.
Political: Focus on how and to what degree a government intervenes in the economy by
analyzing government policies, political stability or instability in overseas markets, foreign
trade policies, tax policies, labour laws, environmental laws, trade restrictions and so on.
Economic: Economic factors in a firm’s external environment are largely macroeconomic,
affecting economy-wide phenomena. Managers need to consider how the following five
macroeconomic factors can affect firm strategy:
Growth rates. Levels of employment. Interest rates. Price stability (inflation and
deflation). Currency exchange rates.
Social: Also known as socio-cultural factors, are the areas that involve the shared belief and
attitudes of the population. These factors include – population growth, age distribution,
health consciousness, career attitudes and so on. These factors are of particular interest as
they have a direct effect on how marketers understand customers and what drives them.
Technological: We all know how fast the technological landscape changes and how this
impacts the way we market our products. Technological factors affect marketing and the
management thereof in three distinct ways:
New ways of producing goods and services
New ways of distributing goods and services
New ways of communicating with target markets
Page | 15
Legal: These factors have both external and internal sides. There are certain laws that affect
the business environment in a certain country while there are certain policies that companies
maintain for themselves. Legal analysis takes into account both of these angles and then
charts out the strategies in light of these legislation. For example, consumer laws, safety
standards, labour laws, etc.
Environmental: These factors include all those that influence or are determined by the
surrounding environment. Factors of a business environmental analysis include but are not
limited to climate, weather, geographical location, global changes in climate, environmental
offsets, etc.
Industry Structure and Firm Strategy: The Five Forces Model

Used for industry analysis. It is used to check the lucrativeness and the general trend in the
industry. This is to help managers understand the profit potential of different industries and
how they can position their respective firms to gain and sustain competitive advantage.
Porter’s model identifies five key competitive forces that managers need to consider when
analyzing the industry environment and formulating competitive strategy:
Threat of entry: The threat of new entrants to the market determines the sustainability of
estimated market share. It is evaluated in terms of market entry barriers which may be in
the form of high fixed cost, product differentiation etc.
Power of suppliers: A competitive market with limited suppliers brings with its high
level of bargaining power of suppliers.
Power of buyers: Multiple products of same category gives the buyers an advantage in
bargaining, thus high bargaining power of buyers exists in multi-brand products. Five
forces analysis helps organizations to understand the factors affecting profitability in a
specific industry and can help to inform decisions relating to: whether to enter a specific
industry; whether to increase capacity in a specific industry; and developing competitive
strategies
Threat of substitutes: There is always a threat of substitute products replacing the
existing product(s) of a firm. Substitutes could lead to obsolescence.
Rivalry among existing competitors: Existing rivalry between firms can take a firm’s
profits to zero and may lead to shut down (ex. During price wars). In a competitive
environment, firm’s decision is highly influenced by what the competitors do.
SWOT Analysis:
This enables to evaluate a firm’s current situation and future prospects by simultaneously
considering internal and external factors. The SWOT analysis encourages managers to scan
the internal and external environments, looking for any relevant factors that might affect the
firm’s current or future competitive advantage.
The focus is on internal and external factors that can affect—in a positive or negative way—the
firm’s ability to gain and sustain a competitive advantage.
Page | 16
To facilitate a SWOT analysis, managers use a set of strategic questions that link the firm’s
internal environment to its external environment to derive strategic implications.
Strategy requires you to make trade-offs in competing - to choose what not to do. Strategy
also requires creating a “fit” among company activities. Fit has to do with the ways a
company’s activities interact and reinforce one another. The activities of the company should
not seem to contradict with one another.
The strategic management process helps company leaders assess their company's present
situation, chalk out strategies, deploy them and analyses the effectiveness of the
implemented strategies. The strategic management process involves analysing cross-
functional business decisions prior to implementing them.
BCG Matrix
The quadrant matrix developed by Boston Consulting Group in the early 1960s is used to plan
market strategies. Growth rate is determined by reference to market research, or it can be
estimated.
Page | 17
“Competitive position” includes an assessment of the firm’s overall market penetration and
profitability compared to the other players in that market. Products are then positioned in
the four cells as shown in the figure.
Cash Cows: Large Market Share in a mature industry. Requires little investment.
Star: Larger Market Share in growing industry. Requires investment to maintain the lead.
Question Marks: Small Market Share in a growing market. Requires focus and resources.
Dogs: Small Market Share in a mature industry. Little prospect for gain.
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STRATEGY &
CONSULTING
33
Consulting and Strategic Management is the continuous planning, monitoring, analysis,
and assessment of all that is necessary for an organization to meet its goals and
objectives. Fast-paced innovation, emerging technologies, and customer expectations
force organizations to think and make decisions strategically to remain successful. The
strategic management process helps company leaders assess their company's present
situation, chalk out strategies, deploy them and analyze the effectiveness of the
implemented strategies. The strategic management process involves analyzing cross-
functional business decisions before implementing them. Strategic management typically
involves:
1. Analyzing internal and external strengths and weaknesses.

2. Formulating action plans.
3. Executing action plans.
4. Evaluating to what degree action plans have been successful and making changes when
desired results are not being produced.
Consulting is a highly valuable buzzword when it comes to job profiles. Why is it so?
‘Advising’ seems to be high in value. Isn’t it?
The answer lies in rapid technological changes and the evolving standards in the
corporate world.
Not everyone or every firm knows everything and even if it does, there is always a better
way to approach the objective that the firm is unaware of. Here lies the value of
consulting.
The general reasons –
1. They are unable to figure it out or get to their desired state on their own.
2. They have a general idea, but they want to get there faster.
3. They want to save time and effort by following an efficient and proven system.
Types of Consulting
Strategy consulting
Their goal is to see the bigger picture and to identify ways in which to increase the
company's overall profitability and competitiveness. They form strategies to reach long-
term goals and oversee the implementation of these, ensuring they are cost-effective and
bring in results (profit).
Firms that are best known for pure strategy services are McKinsey, Bain, and Boston
Consulting Group (BCG).
34
Operations consulting
Operations consultants look at the systems that clients use to reach their goals and work
to enhance their efficiency. They assess all levels of operations including production,
sales, distribution, and customer service. They are interested in how processes can be
refined in terms of costs, time, staff involved and steps required, to best meet targets.
Partners in Performance (PIP) and the ‘Big 4’ advisory firms have a strong presence in
operations consultancy.
Financial consulting
Financial consultants assess a client’s financial position to put forward a plan on how to
better manage the finances of the business. This may involve providing information and
advice on investment strategies, tax issues, and how to manage the everyday expenses of
the business. Financial consulting also covers insurance advice and saving strategies.
Oliver Wyman is well known for their financial consulting services.
Information technology consulting

A consultant in this area provides advice on how to best use technology to enhance a
client’s business. This could involve designing unique software for a company, assisting a
firm-wide transition from PCs to Macs, or testing the efficiency of current devices and
programs within the business. Consulting work in this area is called many things: tech
consulting, IT advisory, business technology services, or IT consulting.
Prominent firms in this space are Accenture, Capgemini, and IR.
Human resources consulting

They work with clients in the recruitment and transition phases to place the best people
in the correct roles. They research and implement well-being systems, attend to
communication issues and handle remuneration and change management. They're
expected to become experts in a company's culture and therefore can consult on
whether two companies could successfully merge without a clash of ethos. HR
consultancy firms also manage to outsource.
Randstad and ManpowerGroup are big names in HR consulting.
Marketing Consulting
A marketing consultant helps in all marketing aspects of a firm’s business - Whether you
need a new logo for your company, a new market position for one of your brands, a new
social media strategy to interact with your customers, or planning and implementing a
marketing strategy.
35
Legal Compliance Consulting
These consulting services help firms ensure that they adhere to federal and local laws
and regulations. A compliance consultant must have a sound knowledge of local laws and
regulations as it’s essential for successful businesses to be compliant with local and
federal laws.
Strategy Tools
Business experts and consultants around the world have several tools and frameworks
that they rely on to analyze a company’s performance. Here are a few of them that might
come in handy during your selection process:
SWOT Analysis:
A SWOT (strengths, weaknesses, opportunities, and threats) analysis is a planning process
that helps your company overcome challenges and determine what new leads to pursue.
A SWOT analysis is a compilation of your company's strengths, weaknesses,
opportunities, and threats. The primary objective of a SWOT analysis is to help
organizations develop a full awareness of all the factors involved in making a business
decision.
PESTEL Analysis:
PESTEL Analysis is a strategic framework used to evaluate the external environment of a
business by breaking down the opportunities and risks into Political, Economic, Social,
Technological, Environmental, and Legal factors.
P – Political; E – Economic; S – Social; T – Technological; E – Environmental; L – Legal
36
BCG Matrix:
Created by the Boston Consulting
Group, the BCG matrix – also known as
the Boston or growth-share matrix –
provides a strategy for analyzing
products according to growth and
relative market share. The BCG model
has been used since 1968 to help
companies gain insights on what
products best help them capitalize on
market share growth opportunities and
give them a competitive advantage.
Cash Cows: Large Market Share in a
mature industry. Requires little
investment.
Star: Larger Market Share in a growing
industry. May require investment to
maintain the lead.
Question Marks: Small Market Share in a
growing market. Requires focus and
resources.
Dog: Small Market Share in a mature
industry. Little prospect of gain
37
The GE–McKinsey nine-box matrix:
The nine-box matrix offers a systematic
approach for the decentralized corporation to
determine where best to invest its cash.
Rather than rely on each business unit's
projections of its future prospects, the
company can judge a unit by two factors that
will determine whether it's going to do well in
the future: the attractiveness of the relevant
industry and the unit’s competitive strength
within that industry.
With units above the diagonal, a company
may pursue strategies of investment and
growth; those along the diagonal may be
candidates for selective investment; those
below the diagonal might be best sold,
liquidated, or run purely for cash. Sorting
units into these three categories is an
essential starting point for the analysis, but
judgment is required to weigh the trade-offs
involved.
Porter’s Five Forces

Porter's Five Forces is a model that identifies and analyzes five competitive forces that
shape every industry and helps determine an industry's weaknesses and strengths. Five
Forces analysis is frequently used to identify an industry's structure to determine corporate
strategy. Porter's model can be applied to any segment of the economy to understand the
level of competition within the industry and enhance a company's long-term profitability.
The Five Forces model is named after Harvard Business School professor, Michael E. Porter.
1. Competitors: Existing rivalry between firms can take a firm’s profits to zero and may
lead to a shutdown. In a competitive environment, a firm’s decision is highly influenced by
what the competitors do.
2. Barriers to Entry: The threat of new entrants to the market determines the sustainability
of the estimated market share. It is evaluated in terms of market entry
barriers which may be in the form of high fixed costs, product differentiation, etc.
3. Substitutes: There is always a threat of substitute products replacing the existing
product(s) of a firm.
38
4. Suppliers: A competitive market with limited suppliers brings with it a high level
of bargaining power for suppliers.
5. Buyers: Multiple products of the same category give the buyers an advantage in
bargaining, thus the high bargaining power of buyers exists in multi-brand products.
Sample Topics to build your argument
Why do you want to pursue consulting?

What are the qualities of a good consultant? 3. Consultancy – Job profiles - Companies
How many lightbulbs are there in Mumbai?
Measuring the effectiveness of any business solutions.
Strategic management approach vs General management approach.
What is Decentralization?
Consulting by an external player vs by an internal player
Value Proposition
Blue ocean strategy
If you want to start a new CCD outlet on campus, what are the factors you should
consider?
39

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Department of Management Studies

DEPARTMENT OF MANAGEMENT STUDIES 2

1. Overview of Strategy and Consulting

Management consultants, also known as business consultants or organizational

DEPARTMENT OF MANAGEMENT STUDIES 3

from strategy to a variety of elements within management. In the methodology upheld

• Financial Advisory Consulting

• Human Resource Consulting

DEPARTMENT OF MANAGEMENT STUDIES 4

• Compliance and Legal Consulting

3. Qualities a consultant should possess

• Teamwork: Consultants always work with a team. Be it within their

• Academic Curiosity: Consultants are often put up in various distinct projects in

• Willing to work long hours: Cracking the problem requires an undetermined

DEPARTMENT OF MANAGEMENT STUDIES 5

• Multitasking: The consulting assignments vary significantly in duration,

4. Top Consulting Firms in the World

• McKinsey and Company

• Boston Consulting Group

Founded in 1963, The Boston Consulting Group (BCG) is a global management-

DEPARTMENT OF MANAGEMENT STUDIES 6

• Bain & Company

PricewaterhouseCoopers LLP (PwC) provides professional services. The Company

DEPARTMENT OF MANAGEMENT STUDIES 7

EY (Ernst & Young)

Ernst and Young is a globally recognized multinational professional service company

5. Business Strategy Frameworks

5.1 SWOT Analysis

SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is an

DEPARTMENT OF MANAGEMENT STUDIES 8

The components of SWOT analysis are:

Opportunities: Events or changes in the external environment that an organization

DEPARTMENT OF MANAGEMENT STUDIES 9

5.2 BCG Matrix

Dogs: These are products with low growth or market share.

Stars: Products in high growth markets with high market share

5.3 PEST Analysis

DEPARTMENT OF MANAGEMENT STUDIES 10

PEST analysis helps in making strategic business decisions, planning marketing

5.4 Porter’s 5 Forces

DEPARTMENT OF MANAGEMENT STUDIES 11

5.5 CAGE Distance Framework

The cultural differences found in a CAGE Distance framework include:

• Different languages and dialects

DEPARTMENT OF MANAGEMENT STUDIES 12

• Different ethnicities and networks

The administrative differences found in a CAGE Distance framework include:

The geographic differences found in a CAGE Distance framework include:

• Physical distance between home country and new market country

The economic differences in a CAGE Distance framework include:

DEPARTMENT OF MANAGEMENT STUDIES 13

5.6 VRIO Framework

The VRIO framework is an internal analysis tool, used by organizations to categorize

DEPARTMENT OF MANAGEMENT STUDIES 14

Organized to capture value: An organization's resource is organized to capture value

5.7 McKinsey’s 7S Model

The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational

Structure: Structure is the way in which a company is organized – chain of command

DEPARTMENT OF MANAGEMENT STUDIES 15

Style: The attitude of senior employees in a company establishes a code of conduct

5.8 3Cs Model: Corporation, Competition, and Customer

DEPARTMENT OF MANAGEMENT STUDIES 16