Bain & Company, inc: Growing the business

The business strategy of Bain and Company in the 1980s

1. Bain & Company, Inc.: Growing the Business 艾凱文 _0353522

2. Bain & Company, Inc.   G lobal  management consulting  firm headquartered in Boston, Massachusetts. It provides advisory services to businesses, non-profit organizations, and governments, Bill Bain and six former BCG consultants founded Bain & Company in 1973.

3. Stock Market Performance Bain & Company Clients Bain ad Company clients had outperformed competitors by a significant margin.

4. Challenges Bain & Company face from competition

5. Possible Business Strategies? Should Bain focus on developing its position in traditional “advanced markets,” or were “developing markets” a more attractive option? Should Bain rely exclusively on internal resources to build its international market position, or were external opportunities, like acquisitions, a joint ventures, and hiring well-positioned outsiders, an appropriate way to expand? How would change affect the strong commitment to “one firm” and “client exclusivity” that had differentiated Bain over the years?

6. Top-Tier Management Consulting Industry Top-tier firms charge much higher fees compared to other management consulting firms. The firms differ by capabilities, Marketing, Specialization (function, Industry and Analytical methods), Firm culture, Willingness to work for multiple clients in an industry.

7. Economics of the Top-Tier Firms The cost structures of the top-tier management consulting firms were similar. The strategic planning segment prices its services at three and one-half to four times staff salary. Large segments of the consulting industry bill services at two to three times staff salaries. According to a Bain director, the key driver of profitability was capacity utilization.

8. Founded by J.O McKinsey in 1926 One of the largest management consulting firms, with 1989 revenues estimated at $635 million. Early and broad international expansion gave McKinsey a strong competitive position. 57% revenues originated from outside the United States. Expansion began in London, In 1971 there 17 offices on four continents Objectivity, independence and professionalism were critical elements of the package. Maintain “one firm” culture: exchanging professionals between offices, worldwide training programs, multioffice development seminars, and interoffice personnel evaluations.

9. Expansion of Top-Tier Management Consulting Firms(Year offices founded)

10. Founded in 1963 by Bruce Henderson, a former Arthur D. Little consultant. First large management consulting firm to specialize in strategy consulting. BCG was responsible for two major concepts of the 1960s: the “growth-share matrix” and the “experience curve”. In 1984 BCG had 160 clients and 350 professional staff. In 1990 14 offices in 9 countries The firm’s non-U.S. offices were responsible for about half BCG’s total revenues. BCG encourage its consulting staff in Europe and japan to spend a portion of their careers in United States and urges U.S. consultants to do the same. In 1987 they had six worldwide practice areas: consumer products, corporate development, financial services, health care, high technology, and operational effectiveness. In 1989, two other practices were set up: organisation and information technology.

11. Geneology of top-tier Management Consulting firms Former BCG professionals had founding roles in various firms

12. Relationship Consulting

13. A “One Firm” Culture Promoting a Common Standard of Quality – develop a set of common values and employee capabilities Recruiting Top Students Worldwide – top minds and team players Emphasizing Global training programs – two week training programs for associate consultants (boot camp). Fostering Interoffice Communication – The most critical element of communication is breaking down the barriers between offices ( phonemail , Videoconferencing). Sharing W orldwide Expertise – “experience center ” contained over 10000 documents chronicling 15 years of work for Bain clients. Annual meetings. Organizing Internatioanally by Client – not by office Role of Country Managers – dual roles, developing client relationships and office management responsibilities. Role of Central Decision-Making

14. International Expansion

15. Growth Strategies: Where to Build Traditional Strategy – Based on high quality client relationships Bain focused on penetrating the British, French, Italian, German, Japanese, and American markets. Penetrating Advanced Markets – Developing Markets – Latin America, Asia

16. Growth Strategies: How to Grow Commitment to Client Exclusivity – Whether the client exclusivity had outlived its usefulness and in fact limited the company’s ability to market its expertise. Conflicts caused Bain to drop projects