Making The Most Out Of A Networking Event at University

If you are going to university, it is likely that you will attend a corporate networking event at some point. Whether you want to form connections with your dream employer, find out about a specific company or industry, or simply go because that’s what all of your friends seem to be doing, these events can be useful, but also somewhat overwhelming. What do people actually do at these events? Who should I talk to and what should I talk about? In this article, I will provide you with some practical advice based on my personal experience attending and organising countless corporate recruitment events at Oxford University.

There are different types of corporate events that involve networking, such as company presentations, workshops, and dinner or drinks events. While some events may have a formal part in the beginning or in between, the networking more or less always looks the same – you grab a drink or a bite to eat, gather around some employees, and try to engage in a conversation. After a while you move on and try to get to know another person. Some people despise this sort of event – after all, it’s only meaningless small talk, isn’t it? Actually, it doesn’t have to be. If you know what you are doing, you can benefit from attending such events and may even find them enjoyable.

First of all, you need to decide what you want to get out of the event. For specific questions concerning your application, it is often useful to talk to the recruitment team. They will not only answer your questions, but may even give you exclusive tips on how to stand out as an applicant. However, often the answers you receive may not be any different from the material presented on the company’s website – so why waste your time at the networking event if you can read through the FAQ much faster?

If you have already browsed the careers website and think that you know most basic facts about the firm as well as the recruitment process, I would advise you to talk to some of the employees in the area you are interested in. They can give you what no amount of research can: a personal narrative. Find out what they personally value about the company’s culture. That way, you can understand the work atmosphere better and simultaneously get a perfect guideline for your cover letter – after all, identifying with the corporate culture as presented by employees is a great reason to choose this firm over any other. Ask company representatives about their day-to-day work and their favourite (or least favourite) projects. Getting an impression of what the work at this firm is like will help you decide whether you want to work there, but it also makes for a good conversation starter if you would like to dig deeper. The more in-depth the conversation becomes, the more memorable it will be for the employee – which only has advantages for you. Sending a follow-up email asking another question about your conversation is also a good idea to make yourself noticed.

You have to keep in mind though: quality is better than quantity. Contrary to popular belief, a networking event is not a competition to see who can collect the most business cards. Having an interesting conversation with one employee followed by an email or LinkedIn exchange is worth much more than a brief chat with ten employees, consisting only of standard questions. Personally, I have stayed in touch with several people I met at university networking events and received useful advice on my applications as well as personal recommendations that got me to the interview stage.

Likewise, networking events can also help you meet fellow students with similar interests. Don’t forget about this aspect – these people may well help you prepare for interviews or tell you about their experience with recruitment processes that you have not gone through yet. After all, a networking event is supposed to be useful for everyone attending. So don’t be nervous – as long as you know what you want to get out of it, it will definitely help you progress your career in one way or another.

Max Kulaga is a finalist reading Economics and Management at the University of Oxford. As a former intern at L.E.K. Consulting in London and President of one of Oxford’s largest business societies, the German-born is keen on sharing his experiences and knowledge about the consulting industry.

Image: Pexels

Mythbusters: The Management Consultant Edition

So you’re interested in being a management consultant? Great! But what is it that they actually do? If you’re still not sure of the answer then read on, as I bust the myths and reveal the realities of what it truly means to be a “management consultant”.

1. Consulting only pertains to the business sector- MYTH

Consultants can be utilised among a broad range of industries and sectors. After all, no business runs smoothly 100% of the time! You can find consultants working with a broad range of sectors from manufacturing and financial services to charities and government. However, the work that consultants do for each sector is not the same; for instance, consultants may work with banks to implement new technologies whilst adhering to financial regulations but work with the manufacturing sector to streamline its supply chain.

2. Consultants can specialise in a certain type of consulting- REAL

Being a “consultant” may sound like a vague term but it is possible to specialise in a certain type of consulting, either with experience or by working for a smaller, niche firm. At a senior consultant or manager level in a large firm, you can specialise in a certain industry and become an expert in that area. Alternatively, there are specialist firms that provide specific types of services like strategy, human resources, IT, finance and outsourcing. If you’re looking for something different still, there are niche firms that focus on a particular sector, and with enough experience and knowledge you can become a freelancer and offer your services to whomever you wish. With all this choice, you’ll easily be able to find an area of consulting that you’re truly interested in and enjoy!

3. It involves a lot of teamwork – REAL

Identifying and offering solutions to large companies would be a mammoth task if you had to do it all by yourself, so thankfully there will always be a team of people to support you. Teamwork is an essential skill for consultants as they typically find themselves working within a team on projects. That is not to say that the work you do won’t be your own, but the whole team will be working closely with the client to identify problems and analyse the issue thoroughly to ensure the recommendations given are accurate and effective.

4. The work is not varied – MYTH

A consultant’s work is never done, as they jump from project to project, and with each business comes a different set of needs and thus a different set of tasks. As a result, consultants can find themselves doing a variety of work on a day-to-day basis, and it is often the wide range of experiences that most attracts people to the profession. Tasks can range from meeting with clients and carrying out research, to preparing presentations and creating computer models. A lot of the work is centred on collecting and analysing data, so you can expect to be conducting interviews, running focus groups and facilitating workshops to get the information you need. But don’t expect to be bored – many consultants cite the varied work as the reason why their job remains interesting and challenging.

5. Consulting is a degree specific industry – MYTH

This is pretty self-evident since there isn’t really a “consulting” degree, but many people assume you must have a business/economics background to be a consultant. Sure, it may help if you already have some basic business knowledge and some firms do favour candidates with numerical/analytical degrees, but that’s not to say you are barred from the profession if you don’t have this knowledge. Many consultants learn on the job through graduate training schemes and firms welcome a wide range of backgrounds and skills to suit their wide range of specialisms. However, as with any corporate job, commercial experience is helpful and commercial awareness (everyone’s favourite graduate recruitment buzzword) is essential. So although you don’t need to have studied business to be a consultant, you will need to show some understanding of how the business world works.

6. It can be a stressful job – REAL

Sadly, this is a reality that you will have to get used to as a consultant. Depending on the project, the hours can be long (a working week of 50 or more hours is common) and the deadlines tight (a project can run anywhere from one day to several months). There can also be a huge amount of pressure and responsibility put on you to hit deadlines so that the project is completed on time. Therefore, being able to deal with stress is a vital skill if you want to succeed in the profession. However, many consultants actively thrive under the pressure, so don’t be completely put off just because you may have to pull some long nights every now and again.

7. There are opportunities to work abroad – REAL

Consultants go to where the clients are, which means you may have to travel abroad. This will be more likely in bigger firms where the work is more international, as bigger clients may have offices overseas. However, even if the work you do isn’t international, consultants tend to travel a lot in general (since they are often based in clients’ offices), so expect to be moving between client sites all around the country if the client site isn’t local.

8. Career progression is structured – REAL

In most consulting firms, there is a structured ladder for career progression. As a graduate, you’ll start off as an analyst, which mainly involves research, data collection and analysis, before moving on to a full consultancy role after gaining some experience. You can progress to a senior consultant or manager level within about three years (depending on how good you are), at which point you will lead the teams and design and develop solutions and projects. From here, you can become a partner or a director of the firm, where you will be responsible for generating new business, developing client relationships and overseeing the growth of the firm. The progression doesn’t have to stop here: many move on to set up their own consulting firms or go freelance. The great thing about consulting is that there is no set time limit on when you can progress to the next level – you can move up when you’re ready. So if you work hard and are good at your job, you’ll reach the top in no time!

Vivien Zhu is a student studying History at the University of Oxford and is considering a career in Management Consultancy. She currently resides in Hertfordshire, England and is a regular contributor to student publications such as Spoon University and the Cherwell.

Image: Pexels

Tips for Landing Your First Job at a Digital Agency

Every year, recruiters get hit with waves of resumes from newly graduated college students looking for internships or starting positions at top firms. In order to make an impact with your potential employer, your resume has to stand out. To help you do this, we made a helpful guide on applying to and landing jobs in digital fields. (This advice is equally relevant for graduates looking for management consulting jobs.) After reading this, you will be able to conduct a successful job search for either an internship or part-time position. So, what are you waiting for? Let’s jump right in. Your job search journey begins with networking!

1. Networking

Landing a job at a digital agency is all about who you know. You have to increase your personal brand to network with industry leaders. One of the easiest ways to do this is to create a LinkedIn profile. Even better, attend conventions pertaining to your industry. There you will be able to meet and connect with new faces who can help advance your career.

2. Use Social Media

Although millennials are familiar with social media platforms, these tools can help you land your dream job. You can use social media tools such as Facebook, Twitter, LinkedIn, and Instagram to help you get to know your employer, as well as the company they represent. You can also use these platforms to promote your professional brand.

3. Do Your Research

A necessary step towards landing your first job is to research the companies and graduate programs that interest you, and any recruiters that can help you land your first role. Be sure to use your social media platforms to their full potential. The more knowledge you have about the company that you’re apply to, the more likely you are to be successful.

4. Create Custom Resumes

Every firm will be different, and have slightly different requirements, that’s why it’s important to alter your resume to fit the job you’re applying for. You should highlight skills and experiences which demonstrate the qualities the company is specifically looking for.

5. Have an Awesome Personal Website

Whether you’re a coder, designer, writer, or aspiring consultant your personal website has to look amazing since it portrays not only who you are, but also the style and quality of work you do. Employers and recruiters will pay attention to every detail. If you leave any stone unturned, it may cost you an interview or a job offer.

6. Follow Directions

When you are applying for jobs, read all of the instructions and follow them carefully. Applications that do not follow the firm’s criteria may not even be looked at.

7. Ask For Advice

Don’t be nervous to talk to the recruiter or company you want to work for. Often they will be happy to provide you with advice on how to apply, and answer any questions you may have about the process or the firm. If you have any contacts who work at the firm, ask them if you can buy them a cup of coffee and ask them a few questions about the organization. Even if the company is not currently hiring, doing something like this can help you make a great first impression, and be in a better position to land your dream job in the future.

8. Be Passionate

If working for a web design agency is what you want, then make sure the firm knows how much you want it. You can stand out from all the other applicants by demonstrating your passion for and commitment to your industry. Having a genuine interest in what you do can make up for a lack of work experience.

9. Don’t Be Afraid To Ask Questions

At the end of the interview, the interviewer will likely ask you if you have any questions. Even if you think you have the answer, ask a question anyway. This shows the interviewer that you are truly interested in the position and the company.

10. Show Your Appreciation

This is one of the best and easiest interview tips to follow. After the interview is over, send a thank you email to everyone you met. This will not only exhibit your appreciation but also your interest in working with the company.

Finding your first real job may seem like an anxiety-inducing task, but with a little preparation, it can be done. All you need is a little dedication, effort, and patience and in no time at all, you will have a foot in the door.

With these ten tips in mind, your job search will be much easier and less stressful to complete.

Do you have any advice for first-time job seekers? Please share your thoughts in the forum!

Wassana Lampech is a medical technology graduate and a freelance writer. She has been writing since her college days, and has been a freelance writer for the past 4 years. You can follow her on Twitter here.

Image: Pexels

Finding the One: A Job-hunter’s Fallacy

In today’s world, the lives of fresh grads are meant to revolve around their careers and professional advancement, and so it is obviously no surprise that so many of us struggle to commit to a specific field, out of fear that it’s not THE perfect job for us.

Much like dating, job-hunting is a game of statistics. And since we concede that it is impossible to know who we will end up with, why do we still insist on knowing exactly what our dream job is before we even enter the job market? Perhaps the key to finding a good fit is to broaden our search scope, apply a few necessary filters, be willing to experiment, and maybe even admit that there may be more than just one right job for you.

Experience

One misconception of recent grads is that their first real job will be great. Most jobs will require years of experience, so you’ll likely start at an entry level position. You should expect that it will be one of, if not the, most demanding job you will have, that the pay will be less than dreamy, and that you will often have to prove yourself. Conversely, this is also the upside of being a new entrant to the job market: you’re competing on equal grounds with people who have just as much experience as you, and you have the chance and energy to prove yourself. So look at it this way: you’re not looking for a job right now, you’re looking for an opportunity.

Company Maturity

You probably already know that there are countless firms out there, big and small, in need of brainpower. As a newcomer, your priority should be to learn as much as you can, as fast as you can. If you have the luxury of working at a startup, go for it, because it will push you to work in different capacities and give you loads of responsibility early on, and you will end up learning more than you could have anywhere else. If you would rather go for one of the major players, you might want to opt for graduate schemes that are much more general but give you a glimpse of different roles through rotations that will allow you to have a better understanding of what you do and don’t want in a job. Companies like Heineken, AB InBev and countless others offer such programs, which are quite competitive to get into, but will help you grow by offering resources, support, and even mentors to help you orient your career in a way that works for you.

Field

This is the most important point of the three. Whatever you do, you will be accumulating experience and connections that will help you land your next, and hopefully better, job. However, if they’re not relevant to what you want your next role to be, you might have some regrets.

This is probably why so many people want to go into consulting: it is general enough to be non-committal, but the learning curve is still sufficiently impressive to get you anywhere you want to go next.

The issue with consulting is that there are only so many roles available, and it’s just not for everyone. Luckily, it’s not the only option out there. Some good starting roles are in sales, since you will master the art of pitching and acquire soft skills that are transferable to any industry. Major players in tech like Facebook, Google, and Microsoft offer some impressive graduate schemes centered around sales roles and with a high intake, which means you will be among several peers who will start at the same time, experience similar obstacles, and make your experience a lot more interesting. Alternatively, you could take a different route by choosing to go for a highly specific role that showcases your work ethic and skills, such as Investment Banking, and hence also act as an open ticket.

Ultimately, finding a job is about selling yourself, so find your unique selling point, whether it’s a language (spoken or coded), a degree, a reference, or anything else, and start applying – not to roles that you think will get you closer to your dream job (even if you don’t know what it is yet), but to ones that will teach you more; at startups, in unique domains, and even abroad. There is no right way to figure out what you want to be doing, but my advice is to try different things, and even if you don’t love what you end up choosing for your first job, by selecting demanding roles, you will at least learn and be challenged until you move on to your next job.

Sarah Yakzan is a Master’s in Management candidate at London Business School. Before moving to London, she got a BA in English Literature from the American University of Beirut, and worked for a year as Marketing and PR manager, External Relations Coordinator, and Blogger. She will start her next role at Facebook in August.

Image: Unsplash

The Consulting Myth

The first piece of advice I was given when I started my Master’s in Management at London Business School was to beware of the mirage of consulting. On the first day of orientation, we were told that we should start applying yesterday, especially if we wanted to get into consulting – but not to put all our eggs in one basket because it was so competitive – and so we all polished our resumes and contrived our cover letters and sent them out left and right to anyone with an inbox.

As the rejections began to come through and most of us partook in a collective sigh of “oh well!”, applying to consulting began to seem like more of a rite of passage than a genuine attempt at forging a professional path. It was at this time, about two months into the program, that I began to wonder: Is consulting really the holy grail of careers?

Consultants will tell you that yes, it’s the best type of role you could hope to land; the learning curve is incredibly steep, it’s a free pass into any industry you want after a few years, and if that’s not enough for you, the benefits will make you come around. But what few of them admit is how demanding the job really is. The hours are ridiculous, the work is tedious, and you will probably be living out of your suitcase for weeks at a time. A classmate who accepted an offer from McKinsey & Company described his concerns about starting by saying “I will have all this money, and no time to spend it”.

Consulting is almost the business equivalent of being a doctor: your job is to diagnose and fix problems within companies and sometimes even industries, and you will always be on call. Does that mean you shouldn’t apply? Absolutely not, but what it does mean is that you should make sure you want the job. Not the benefits, not the travel, not the prestige. The research, endless calls, early meetings, and long hours painstakingly putting together beautiful slides instead of meeting your friends for drinks or going on a weekend getaway.

It’s not a matter of having what it takes for the job. It’s a matter of whether or not you will be happy doing it. In other words, would you do it for free? A good method to test how well you would fit into consulting is to prepare for interviews. Apply to whatever roles you want, do your online assessments, and while you wait to hear back about whether you have an interview, start doing cases as often as you can, with as many people as you can, for as long as you can. If you continue to find some fun in the challenge of solving cases and crunching data, then congratulations, you have found your calling! If you are like me, and you get bored a few days into it, maybe it’s not the right choice right now.

Consulting prep isn’t actually “boring”, but it does require a certain ability to memorize detailed frameworks and apply them to case after case, which can become tiring because of the effort of trying to impose a logical structure onto your thinking process. There is nothing wrong with these frameworks; in fact they are a highly sophisticated method of tackling problems, but I personally found them frustrating because they didn’t always fit with a certain case, they limited how creative you could get in trying to find a solution, and they seemed too perfect to be applicable to the real world as more than an initial structure, which made it difficult to see the point of being interviewed on the basis of how well I could transpose frameworks onto a case. Nonetheless, this is not a general truth, and consulting applications are not only about frameworks, they are also about your personal fit with a certain firm, how well you pitch your solution, etc., and so there is plenty to like in both the interview process and the roles themselves, as long as you really want them.

After I realized that it was not the right time for consulting, I started looking at what else was out there, and believe me, there’s a lot. I was lucky enough to find something perfect for me in Tech, and can’t wait to start, but it’s only because I questioned whether or not I really wanted to be a consultant that I figured out what my next step would be. It’s not the end of the world if you don’t want the same thing as everyone else. In fact, it’s a good way to start looking elsewhere and find a field where you can make a real impact and be happy doing it.

Sarah Yakzan is a Master’s in Management candidate at London Business School. Before moving to London, she got a BA in English Literature from the American University of Beirut, and worked for a year as Marketing and PR manager, External Relations Coordinator, and Blogger. She will start her next role at Facebook in August.

Image: Flickr

5 Steps To Securing a Consulting Internship

Few internship schemes are as competitive as those offered by top management consulting firms – for many good reasons. Instead of making coffee, you will work on challenging projects as part of a team. Your salary will be more than decent. And even if you find out that consulting is not for you, the knowledge and skills you’ve acquired will be highly appreciated by any employer around the world. To get an internship though, it is important to know what to expect from the application process and crucial to prepare before it’s too late.

Here are 5 steps that will help you secure your dream internship:

1. Get to know the firms you’re applying to

At first glance, a lot of consulting firms seem similar and they all promise to solve their clients’ business problems in the most innovative manner. Once you do your research though, you should be able to figure out what sets them apart from one another. Who are their clients? Do they serve specific industries or do they have functional expertise in certain areas? Do they work on the client site or from the home office?

More importantly, however, you should get to know people at each firm. Most consultancies hold company presentations, networking events, or workshops for students at target universities, which enable you to get to know them better. If they don’t, you can try to contact alumni from your school or university who now work in consulting and arrange a phone call with them. Nothing tells you more about a firm than meeting the people who work there – the notion of a ‘company culture’ may sound like a cliché at first, but it genuinely provides insight. If you don’t like the people at the firm, will you really be able to spend long days working with them?

2. Spend some time perfecting your CV and cover letter

Consultants and recruiters often spend no more than a few seconds looking at your application when shortlisting interview candidates. To stand out among other applicants, you should not just meet most of the screening criteria – such as a good academic track record, relevant work experience, extracurricular activities and interesting hobbies – but should also show that you know the firm you’re applying to. Research what each firm is looking for in a candidate and adjust your CV and cover letter to match that profile. Think about why the firm you’re applying to attracts you and resort to the conversations you’ve had with its employees if appropriate.

3. Practice aptitude tests before taking them

In many countries you will have to take aptitude tests after you’ve sent in your application, either online or as part of an assessment centre. If you are naturally good at these numerical, verbal, and logical reasoning tests, don’t worry too much about it. If you’re not as confident though, then it should definitely not stop you from getting your internship! There are plenty of free practice tests around, so make good use of the resources available to you and be sure to analyse the correct answers. Soon you will discover certain patterns and learn what to look out for.

4. Get comfortable with case studies and develop your own style

Case studies are business problems you have to solve with the help of your interviewer and they are arguably the most difficult part of the application process. They involve coming up with a structure, calculating relevant business figures, and developing recommendations for a hypothetical client. Given there are hundreds of websites out there explaining how case studies work and how to approach them, I will not go into any details here. I will, however, stress the importance of practising them with others: Reading a case at home and doing it under time pressure with another person staring at you while you calculate large numbers in your head are two completely different things. Try to find other aspiring consultants in your area and set up meetings with them. If you can’t find anyone, use websites such as PrepLounge to find case study partners and start practicing at least a few weeks before your first interview. While you should definitely not overdo it – ultimately, your interviewers want to see how you think and not how well you can memorise solutions that may not even fit the case given – practicing case studies will help you develop your own way of structuring the problem and working towards the solution. Using your own methods instead of blindly following common frameworks will definitely help you stand out among other applicants.

5. Think about your past achievements and prepare for tough competency questions

Case studies only make up about half of each interview. The other half will be spent talking about your CV, your skills, and your attitudes towards topics such as teamwork and leadership. Of course, this part of the interview can vary significantly depending on your interviewers as well as your individual story, but it is worth thinking about some potential questions beforehand. Make a list of skills your potential employer may be looking for and write down one or two examples from your past where you have showcased each skill. Also think about problems you’ve had to face during past ventures, why they occurred, and how such situations could be solved. It is likely that your interviewer will drill far beyond the surface, so be prepared to discuss each statement you make in great depth.

If you’ve followed all of these steps, there’s only one more thing you can do to get your dream internship – show up on time, be confident, and rock your interviews. Good luck!

Max Kulaga is a finalist reading Economics and Management at the University of Oxford. As a former intern at L.E.K. Consulting in London and President of one of Oxford’s largest business societies, the German-born is keen on sharing his experiences and knowledge about the consulting industry.

Image: Pexels

Commercial Awareness – what is it and how do I get it?

“Commercial awareness” is a buzzword that employers like to toss around a lot nowadays, but what is it and how do you get it?

Thankfully, gaining “commercial awareness” is a lot less scary than you think – all it really means is to have an awareness of what’s going on in the world and in particular, the business world. So, if you know who the US president is and what he’s done recently, you may have more “commercial awareness” than you think (because let’s be honest, who hasn’t heard about Trump’s policies?)!

For those of you who are still puzzled or (slightly worryingly) don’t know who the US president is, here are six easy ways to get “commercially aware” fast!

1. Finimize

When I first discovered Finimize, it was like a godsend – finally, financial and business news in a language I could understand!

For those of you not in the know, Finimize is a free daily email service that summarizes and explains the top financial headlines in a form that is quick and easy to digest – it even states how long it will take to read it (which is never longer than about 3.5 mins).

The email usually contains the two top business headlines of the day, either from around the globe or from your country depending on your preference, and it will recommend things to read if you want to expand your knowledge further. There’s also an inspirational quote thrown in there to get you motivated for the day (the email is usually sent around midnight so it will motivate you for a full 24 hours).

To sign up, all you need is your email and then voila – you’re already halfway there to being commercially aware!

2. The News

This should be a given but watching or reading the news is the easiest way to get an awareness of what’s happening in the world. It doesn’t matter what form you get it in, video, website, print, as long as you get the information. It doesn’t need to be The Financial Times or The Economist either – the Business section on BBC News or any other equivalent news site is equally as sufficient.

If you want to know more about a particular issue or want to see if your potential employer has been involved in anything of note recently, just type the keywords or the name of the company into Google and press the “News” tab – the most recent news will come up first.

If you want to stay ahead of the game and be informed of the news as it happens, you can set up a Google Alert on your mobile devices and your PC so that you’ll always be the first to know of any developments.

3. Social Media

If you didn’t know already, social media can be used for more than sending your friends funny pictures or mildly stalking your crush nowadays.

Major news outlets have their own “stories” on Snapchat for you to flick through, Facebook have trending issues on their sidebar and trending hashtags on Twitter usually means something big has gone down.

Furthermore, you can follow news accounts on Facebook and Twitter and be notified whenever developments occur – simply adjust your settings so that news stories appear first on your Newsfeed or get notifications when there has been breaking news. It has never been easier to be commercially aware, so take advantage of it!

4. Books

If you feel the need to hit the books, there are some very informative and easy to understand books out there that are designed specifically to make the commercially unaware exactly the opposite.

Know the City” by Chris Stoakes has been recommended to me several times by professionals and peers alike, and for good reason – it gives a high level overview of key financial concepts and products in a readable form.

Another book that’s been recommended to me is “The Money Machine” by Phillip Coggan; though I haven’t read it personally, the reviews on Amazon similarly say it was easy to read and it explains the essentials.

If you find these books too tough to crack, maybe it’s time to go back to basics – there’s no shame in revising those A Level Economics textbooks if it means you can actually understand what’s going on when it gets more complicated.

5. YouTube Videos

YouTube has a fantastic selection of videos that explain the basics of the business world, mostly created by people who were in your situation not too long ago.

There are videos that use cartoons to explain how a transaction works, video courses in finance featuring “Fault in Our Stars” author John Green (his series of Crash Courses is both amusing and informative) and there are vloggers dedicated to easing you into the scary world of commerce.

Some films are also good at explaining the complicated stuff– The Big Short explains the Financial Crisis of 2008 really well and in a quirky, breaking the fourth wall kind of way that keeps it interesting (and who doesn’t want to see Margot Robbie in a bathtub explaining mortgage backed securities?)

6. University

By university, I don’t mean you have to do another degree to be commercially aware but rather that you utilise the resources your university has.

For instance, you can join a finance or business related society – not only will it look great on your CV and demonstrate your passion for commerce, but the society will probably host talks and workshops that can help develop your commercial knowledge. Most speakers don’t assume all students have an understanding of business and financial concepts, so they will go over the basics before moving on to the more difficult topics.

Subscriptions to publications like The Economist will also be cheaper for students; if you think you will actually read them, ask around for your university rep and they will be able to offer you a much better deal than if you subscribed normally.

And that’s it!

Six (6) easy steps to become commercially aware even if you know absolutely nothing, and frankly, even by doing just one you’re already in a much better position than most!

Turns out “commercial awareness” is simply another thing employers have made to sound intimidating that in reality means very little. Plus, it’s unlikely they’ll ask you more than one or two questions about it at an interview anyway. So don’t stress – knowing a little will go a long way.

Vivien Zhu is a student studying History at the University of Oxford and is considering a career in Management Consultancy. She currently resides in Hertfordshire, England and is a regular contributor to student publications such as Spoon University and the Cherwell.

Image: Flickr

5 Steps to Structuring A Professional Email

One thing they don’t teach you at university, but which every young professional needs to learn, is how to write an effective email.

Here are five (5) steps to help you successfully structure your professional emails.

Step 1: Start with a greeting

You should start your email with a greeting.

It is important to do this for three (3) reasons. Firstly, it is convention; presumably a tradition carried over from the days when people communicated via telegrams and letters. Secondly, your greeting will help the recipient identify whether the email is intended for her. Thirdly, and most importantly, a greeting personalises your email and increases the chance that the recipient will continue reading. Emails without a greeting are much more likely to be ignored.

Generally, you should include in your greeting the name of anyone whose email address appears in the To field. Although, if you are sending the email to more than three people, you can start with a more general greeting such as:

Dear all,

Hi team,

 

If you don’t know the name of the recipient, or you are sending a bulk email to multiple recipients, you can use various alternatives such as:

Dear shareholder,

Dear customer,

Dear Sir/Madam,

If your relationship with the recipient is formal, and you are emailing the person for the first time (for example, a manager, partner, client on a project, or a professional at another firm), then you can use “Dear” followed by the person’s first name. For example:

Dear Sarah,

If you are exchanging emails back and forth and the recipient has dropped the word “Dear” in response to your emails, or if you feel that some rapport has been established, then you can drop the word “Dear” and simply use the recipient’s first name. For example:

Sarah,

If you are sending an email to a friend, or if you are sending an email to a colleague who you know well and your work culture is quite casual, then you can use a more informal greeting, such as:

Hi Sarah,

Hey Sarah,

Step 2: Open with a compliment, pleasantry or word of thanks

After greeting the recipient, you should open your email with a compliment, pleasantry or word of thanks. This is polite, and will make the recipient more receptive to your message.

If you are writing to someone you don’t know for the first time, then you might open your email with a compliment such as:

I enjoyed your talk about Artificial Intelligence last Friday.

I just finished reading your article about Cryptocurrency. Very insightful!

If you are writing to someone you know, you can open your email with a pleasantry such as, “Hope you are well!” or “How are things?”.

Alternatively, if you are replying to an email, then you should start by thanking the other person. For example:

Thank you for your questions.

Thank you for your prompt response.

Thanks for getting back to me.

Step 3: Communicate your message

The third thing you need to do is to communicate your message.

In doing so, there are five (5) tips to keep in mind.

1. State your purpose:

Start the substance of your email by stating your purpose. For example, you could say “We are writing in relation to …”, “We are writing to enquire about …” or “I am emailing to ask you about …”. By stating your purpose at the beginning, this will help the recipient to understand the relevance and importance of your email, to digest and understand your message, and to take action more quickly.

2. PDS:

Your email should be polite, direct and specific. Language can be ambiguous, and any uncertainty in your email will create stress and waste valuable time.

For example, instead of saying something like “We have a few comments on the documents.” you could instead say “Please see below our comments on the shareholder’s agreement.” (emphasis added)

If you are writing an email to multiple recipients, and some of them need to do something, then you should mention those specific people by name in the email.

3. Highlight key information:

Format your email and highlight key information to help the recipient scan your email and quickly digest your message. You can do this in various ways, for example:

  • Separate each paragraph by a blank line. Large unbroken blocks of text are daunting and hard to digest.
  • Bold key words.
  • If it is a long email, group information under headings.

4. Refer to attachments:

If you are attaching documents to your email, refer to them in your email; don’t just leave them hanging. For example, instead of saying “We have some comments on the business plan.” you could instead say “Please see attached our comments on the business plan.” or “We have some comments on the business plan (attached).”

5. Clarify next steps:

After the recipient has read your email, what needs to happen next? It is generally a good idea to clarify the next steps. Who needs to do what, and by when? For example:

Could you please send me your comments this evening?

Could you please write the article by Friday 31 March?

Please talk to John about the business plan, and then get back to me.

If appropriate, provide the recipient with a range of options. This will increase acceptance and allow you to better control the relationship. For example, instead of saying “We need to discuss.” you could say “Can we please have a call to discuss the shareholder’s agreement tomorrow: 10am-11am, 2pm-3pm, or 7pm-8pm?”

Step 4: Close with polite remarks

You may find yourself working on multiple deals or projects at the same time, all of which have tight deadlines. This can sometimes become very stressful. As a result, it is important to always conclude your emails on a positive and friendly note.

Your closing remarks should make it clear that the email has come to an end, and might also re-iterate your call to action.

It is best practice to conclude with some polite closing remarks and by thanking the reader. Examples of polite closing remarks include:

If you have any questions, please let me know.

I look forward to hearing from you.

Which should be followed by a word of thanks, examples of which include:

Thank you for your cooperation.

Thank you for your help with this.

Many thanks!

Step 5: End with a friendly signoff

The last step is to include an appropriate signoff along with your name.

You can select a professional signoff such as “Kind regards,”, “Best regards,” or “Sincerely,”.

Be careful to avoid casual signoffs such as “Best wishes,” or “Cheers,” unless you are good friends with the person.

If you found this article interesting or insightful, please download “How to Craft an Effective Business Email.” It contains additional information, plus a sample of an effective professional email.

(Image Source: Flickr)

Why Consulting?

First and foremost I want to address the myth that all high achieving students have about consulting, “You need talent to be a consultant!”. I completely dismiss this notion and would like to replace it with another idea, “You need no special talent, you only need to be passionately curious!”. Curiosity drives intuition and that’s exactly what consultants thrive on – Business Intuition.

Not too long ago, I ditched the daily milkshake that I used to grab on my way to work from a little corner shop near my office. For 3 long years, milkshakes were my daily drug, but all of a sudden I stopped buying them, and so did others. Do you want to know why? Keep reading along.

What a consumer perceives about a product, a company must foresee in advance. A consumer does not necessarily know what they need, and so a company has a unique opportunity to create a need for its consumers. As a result, it is the responsibility of the company to understand the consumer more than the consumer understands themselves.

Going back to my milkshake story, can you guess why customers stopped buying milkshakes and why the company’s sales hit rock bottom?

Was there a new milk bar in town?

Or had there been an unfortunate change to the milkshake’s recipe?

Neither of these were the case.

So, what had changed?

As it turned out, the only change that had been introduced was a change in the design of the milkshake glass. To make it more attractive, the company had created a new plastic glass that was a treat for the eyes but not for hands. It was much heavier than the previous one.

Now, you might be wondering, why is it important to understand the design of the milkshake glass? As long as it looks beautiful, why worry about the weight?

Well, let me introduce you to the world of numbers.

About 67.8% of the total milkshake sales were between 7 am to 10 am on weekdays. Of those who bought the shakes, 92% of the customers were working professionals who took the shake on-the-go, and 73% of those morning milkshake lovers travelled by public transport while sipping their shake. The new heavy milkshake glass made it too inconvenient for people to carry while hopping on and off of trains. As a result, the change in glass design directly affected the customers who bought more than 60% of the shop’s milkshakes.

The company could not figure out the cause of its declining sales until it consulted a leading management consulting firm that performed a customer analysis and identified the needs of the milk bar’s largest revenue generating customer segment.

Was this rocket science? Or was an advanced degree required to fix this problem? I can’t see anything here but simple business intuition and an ability to understand the customer.

Voila! Consulting comes easy. Doesn’t it?

Well, not really! Simple business intuition is something that takes time to develop as you learn about your clients’ vision, their positioning in the market, and the needs of their customers.

So why choose a career in consulting?

Well, if you found yourself curious to know why the milkshakes weren’t selling, then you really might be suited to consulting. A career where you seek solutions to seemingly complex problems which often have common sense solutions; where you have the opportunity to fine-tune or transform a client’s business; and where you are constantly challenged to go beyond your intellectual limits to provide advice on entirely new businesses, products and markets.

If you are attracted to a dynamic yet demanding work environment, then consulting might be the field for you.

Bhavya Gandhi is passionate about solving business problems and creating an impact in the lives of people for both economic as well as human good.

Image: Pexels

Management Consultancy 101: How to navigate your first application

So you’ve decided you want to be a management consultant? Congrats, you’re now one of thousands competing for the same job! And there’s your first problem: how do you stand out? The first step is always the hardest and sadly the most important, so here’s my guide on how to tackle your first consultancy job application.

Step 1: Why you?

To be able to convince employers to hire you, first you have to convince yourself to hire you. Understanding what you are good at is vital to answering later questions of why you would be a good consultant and why you want to be one. After all, employers often say they want to hear your passion and enthusiasm for the job – if you don’t really understand why you’re applying, how can you expect them to know? What I did first was research what a consultant actually does and the skills required. The key skills I found are as follows:

  • Problem solving
  • Understanding of businesses/organisations
  • Research and data collection skills
  • Being able to analyse the info collected
  • Presentation skills
  • Being able to manage projects
  • Leadership and teamwork skills

Now you know what you need to do, the next question to ask yourself is: can I do it and what evidence do I have to prove it? Under each skill, write down an example of when you demonstrated said skill. Try to use a variety of examples- you don’t want to seem like you only ever achieved one thing and have done nothing else since then! More recent examples work better too for the same reason. You don’t need to have done loads of work experience or have been the president of 3 different student societies – you just need to show that you have carried out that skill well. If you can find a list of the firm’s values, make sure you can demonstrate that you adhere to these values through your examples too.

Step 2: Why them?

Once you’ve understood what a consultant does and why you would be good at it, next you have to ask why you WANT to do it. You could be the perfect candidate for this job but if you’re not passionate about it, then what’s the point in even trying? The question pertains to both why you want to be a consultant and why you want to be a consultant for that particular firm. First, make a list of all the reasons why you want to be a consultant (aside from the obvious reason of money because that’s TOO obvious). This should be relatively easy – if it’s not, then maybe it’s time to rethink that career choice.

Next it’s time to do research on the consultancy firm you’re applying for. Try to extend your research to more than just the firm’s website – though it’s important to know the firm well, there are many things that the website will say that is a) Convoluted media spiel and b) Not applicable to you. You’re applying for the experience of working there, so talk to current employees at careers fairs, look at online forums for what people have said about their experience and look at profiles for the firm that have been written by someone outside the firm. Plus, all of this will show that you have thoroughly researched the firm and so you must really want to work there! Make sure your reasons for applying pertain to your own priorities and interests – employers are shopping for you too.

Step 3: The CV and cover letter

Writing a good cover letter is essential to make sure you stand out and allows you to bring all the research that you have done together. I tend to structure my cover letter like this:

  1. Short introduction – who are you, what are you studying etc
  2. Why you want to be a consultant
  3. Why you would be a good consultant
  4. Why you want to work for this firm
  5. Thank you and goodbye

Since you already have all the information on hand, all you have to do is turn that information into coherent and grammatically correct sentences. Make sure your sentences aren’t too convoluted and long – graduate recruitment have to read hundreds of these letters, so make sure your writing is succinct and to the point. Remember, your cover letter only needs to be a page long! When you’ve finished, read it out loud to see if it makes sense and that you have got all your points across clearly. Hold it away from you and look at the page – is it just one solid block of text or have you clearly signposted your main points through indentations/your paragraphs? Before you send it off, make sure at least one other person has read it. It’s easy for you to miss spelling and grammar mistakes and it’s useful to get a second opinion from someone who probably has more experience applying for jobs than you.

Usually firms will ask you to send your cover letter along with your CV. The same rules apply here – hold it away from you to make sure your points come across clearly and make sure someone else has read it. CVs pretty much all follow the same set structure, so look online to find out what this is and set it out accordingly. The only thing you can do to stand out here is through your relevant work experience and extra-curricular activities – the same examples you have used in your cover letter but reduced to several bullet points.

Once you’ve sent it off, you’re done! (for now). Now comes the sweet torture of waiting to hear if you’ve progressed to the next stage. What comes next won’t be easy, but that’s another story for another time…

Vivien Zhu is a student studying History at the University of Oxford and is considering a career in Management Consultancy. She currently resides in Hertfordshire, England and is a regular contributor to student publications such as Spoon University and the Cherwell.

(Image Source: Pexels)

Is Peter Mandelson really a strategy consultant?

As a journalist I have followed one simple rule: anything Peter Mandelson wants to conceal is something that the British people need to know.

The rule was established over twenty years ago when as an MP he took a whacking great loan from a fellow MP, Geoffrey Robinson, and decided to conceal this from his constituents, from the House of Commons, from his party leader, and from the general public. He maintained the concealment when he and Robinson both became ministers. Its eventual revelation caused his first resignation from government. He made a comeback but had to resign a second time, as the result of excessive “spin” in his response to charges of improper conduct as minister in charge of the Millennium Dome. He disappeared to the EU for some years as Trade Commissioner, but was brought back to government by a desperate Gordon Brown. He gave him a peerage, which allowed him to exercise a great deal of power without being elected.

Throughout his career, Mandelson has faced regular questions about his relationships with special interests or rich and influential people and about the sources of his wealth, which is far greater than can be accounted for from his public career.

In 2010 after the voters ejected him from government, Lord Mandelson launched a consultancy called Global Counsel of which he is still Chairman. Its prime asset then and now is his experience of politics and government, where he has enduring contacts, in the UK and overseas. However, when he fulfilled his obligation as a peer to declare this role in the public Register of Lords’ Interests he called the firm a “strategic advice consultancy”, and he has continued to do so to this day.

The Lords authorities have accepted this for over six years, although all the publicly available evidence suggests that the firm is really a public affairs consultancy. They may have done this for practical reasons. The poor old Registrar now has over 800 peers to police because party leaders have packed the House with cronies and donors, and he does not have the resources to look behind any individual peer’s declaration. But the House is rather an unworldly place and its members and staff may not know what a recognized, professional strategy consultant is expected to do.

I have taken advice from professional associations and other authorities who tell me that strategic management is a six-step process:

  1. Identifying a client’s current mission, goals and strategies
  2. Analysing the external environment (opportunities and threats)
  3. Analysing the internal environment (strengths and weaknesses)
  4. Formulating strategies
  5. Implementing strategies
  6. Evaluating results

A genuine strategy consultant will provide advice to clients on at least the first four steps of this process. However, on the evidence of its website Global Counsel is equipped only to help clients with steps 2) and 3) and these only in relation to the narrow scope of public policy issues and relationships with governments, lawmakers, regulators, the media and public opinion.

Global Counsel is not a member of any of the professional bodies which represent strategic consultants or the management consulting industry as a whole. In company with Lord Mandelson himself, the experience of its team is overwhelmingly concentrated in government, politics or the media. None have worked as a “strategy consultant” anywhere else. The firm asks for public affairs experience in the people it recruits. The firm publishes commentaries on public affairs, presumably to show off its abilities in this area to potential clients.

The firm is very secretive about its clients, but three published media reports on its activities all indicate assignments in the sphere of public affairs. It helped the much-criticized company Asia Pulp and Paper respond to a new EU directive designed to combat illegal logging. It tried to obtain a contract to improve the public reputation of the Maldive Islands government based on existing work for unnamed investors in the islands. It also helped the British Bankers’ Association prepare its response to Brexit.

Very recently the firm acquired as Deputy Chairman another peer of great experience in business and public life and with a high reputation for probity: Lord (Paul) Myners. He listed Global Counsel on the Register of Lords’ Interests as a “public policy and regulatory advice organisation”. This is in line with the firm’s part-owner, the giant communications conglomerate WPP plc. It lists Global Counsel in its family of companies under the heading of “policy and regulation.”

Lord Myners and WPP thus identify Global Counsel as a public affairs consultancy. They are surely right, and Lord Mandelson is surely wrong to suggest otherwise. There is nothing wrong with public affairs consultancy. It is an honourable calling and Global Counsel is probably very good at it. However, the firm should not be shy about citing its clients and its achievements for them (it is the best way of getting new business): Lord Mandelson, as its Chairman, should help them in this. Keeping his clients secret simply encourages people to think that some of them might be embarrassing or even unethical.

Does it matter if Peter Mandelson has made a false claim about his firm in the Lords Register?

From a market point of view, probably not. No client ever chose a strategy consultant or public affairs consultant on the basis of the Lords Register.

However, for the general public any false claim matters a great deal. Peers have a duty to give correct information on the Register and they should not use it to give themselves a status they have not earned, whether as strategy consultants or rocket scientists or plumbers.

Moreover, Lord Mandelson has resisted attempts to make him reveal the clients of his consultancy Global Counsel for over five years, and has withheld them from the Register of Lords Interests, even though their disclosure appears to be required. This is partly because of a general obligation to declare anything which might influence his conduct in Parliament (para 11 of the Code of Conduct for peers) and partly because peers are specifically required to disclose any clients for whom they supply “public affairs advice or services” (para 61 of the Guide).

The Guide has always given peers two potential escapes from disclosure. One is to say that they and their consultancies are not in the public affairs business. Unfortunately, the Guide has never defined the term “public affairs,” so an unscrupulous peer gets a little room to argue that it should not apply to him and his consultancy. That, I am sure, is why Lord Mandelson describes Global Counsel as a “strategic advice consultancy”. I believe he has never had any right to claim this, and that in any case it is a distinction without a difference, since strategy consultants have to make judgements on public affairs issues as part of their service to clients.

It is important to remember that the House of Lords has never required more disclosure than the bare name of a peer’s client. If Lord Mandelson were a doctor or a therapist, or if he and the firm had some highly specialized focus it might damage a client to be publicly identified. But neither of these things is true. It reveals nothing about a client or its business to be identified as a buyer of public affairs advice or services from Lord Mandelson and his firm, no more than revealing that it buys its stationery from Staples. I see no motive for a client to withhold its bare name from the Register. Several have been identified in the media (one by Lord Mandelson himself!) without any complaint from the clients concerned. So, one has to assume that it is Lord Mandelson who holds the motive for withholding their names. This naturally prompts the assumption that some of the clients are embarassing to him, perhaps even unethical.

If you would like to see Lord Mandelson’s entry for Global Counsel corrected, particularly if you are a recognized strategy consultant, you should write to the Lords Commissioner for Standards, Lucy Scott-Moncrieff CBE, at the House of Lords, London SW1A 0PW. You should mention paragraph 13 of the Code of Conduct for peers (“Members are responsible for ensuring that their registered interests are accurate and up-to-date.”) You should not on any account mention my name because she thinks I am a vexatious complainer and she may be right.

Richard Heller is an author and journalist. He exposed the Great Surfball Scandal in 1998, when Peter Mandelson, as Minister in charge, falsely claimed that the Millennium Dome would contain an attraction called “Surfball: the sport of the 21st century.” His latest book (with Peter Oborne) is White On Green celebrating the drama of Pakistan cricket, published by Simon & Schuster.

How to get a head start as a first-year student

Every now and then, I meet students in their final year at university who are worried about applying for graduate jobs in consulting. “It seems like a great job – but I just don’t think my CV is good enough” is something I have heard many times.

True, graduate schemes at top firms are very competitive, and while some people are able to succeed without any previous relevant experience, it is useful to get a head start as early as possible. Likewise, if you are in the lucky position to know you want to go into consulting during your first year at university (or even your final year at school), it may seem difficult to get a grip on what exactly you can do now to stand out later.

The following list of options should serve as a rough guide, but keep in mind that there is no ‘right way’ and you may find that other activities are a much better fit for you. The options are mainly targeted at undergraduate students in the United Kingdom, but could also serve as inspiration for students from all over the world.

Consulting Insight Programmes

Some firms, such as McKinsey, BCG, and Oliver Wyman (among others), offer short insight programmes to give you some idea what consulting is all about. These programmes are probably the best way to find out whether you are interested in applying for summer internships after your penultimate year or graduate roles, while also providing you with a serious career advantage.

Not only is having a big brand name on your CV a valuable gain, you will also meet people from all over the organization who can give you advice and help you get a summer internship the year after. Insight programmes usually take place in the spring, with deadlines in December or January.

Investment Banking Spring Weeks

Even if you don’t want to go into investment banking, doing a spring week will help you gain some relevant experience and might give you an edge over your competitors when it comes to consulting internships or jobs. The good news is that almost every investment bank offers a spring week or insight programme, which means that there are more spaces available than for the consulting insight days. Nevertheless, these programmes are still highly sought after and require a basic understanding of finance.

In addition to upgrading your CV with a major brand name, doing a spring week can highlight your interest in business-related topics. As the name suggests, most spring weeks take place in the spring of your first year (although some banks also offer summer insight programmes) and require an early application, given that the majority investment banks recruit on a rolling basis. Applications usually open in August or September and close in December or January.

Extracurricular Commitment

Another way to stand out is through extracurricular activities. For example, you could join a student society, take on a part-time job (such as a campus ambassador role for a large company), or enter a business-related competition.

While you should obviously enjoy what you are doing, it is also important that your commitment allows you to showcase transferable skills like teamwork, leadership, analytical thinking, and communication. In the end, anything that requires you to develop or improve those skills will increase your value as a potential employee and can serve as a great topic of conversation.

Networking events

Alright, if you are in your first year at university, you definitely won’t need to spend every evening at a different networking event. However, it may be useful to go to one or two on-campus events to find out what they are like. That way, when it comes to the point at which you will be applying for internships or graduate roles, you will be much more confident and better at holding interesting conversations and connecting with representatives of your dream firm.

As I mentioned earlier, there are many ways into consulting. None of the paths listed in this article can guarantee you a job, and simultaneously, you might succeed without any of them if you have a great skill set and an interesting story to tell. But if you are keen to get started to build your profile as early as possible, hopefully this list is of help.

Max Kulaga is a finalist reading Economics and Management at the University of Oxford. As a former intern at L.E.K. Consulting in London and President of one of Oxford’s largest business societies, the German-born is keen on sharing his experiences and knowledge about the consulting industry.

(Image Source: Pexels)

Travel, Training and Mentorship

Travel, Training and Mentorship

Three significant aspects in the life of a management consultant: travel, training and mentorship.

Travel

When it comes to travel, different consulting firms have different policies. McKinsey consultants often spend Monday to Thursday at the client site with Fridays in the office. Bain and BCG often spend a lot of time with the client at the beginning and end of the project but less time in between.

Training

Consultants are the primary asset of a consulting firm, and top consulting firms invest a considerable amount on formal training and development programs.

Consultants may spend as much as eight weeks per year attending formal training sessions and conferences.

Since university courses are often overly theoretical and academic, the focus on training and development can serve as an invaluable bridge into the corporate world. This can lay a solid foundation for a career in the consulting industry, as well as open up attractive exit opportunities.

Mentorship

Consulting firms will typically assign new recruits with a formal mentor.

A mentor is responsible for overseeing professional development and can be an invaluable source of career guidance, an advocate to help you get staffed on projects and a person to champion your promotion within the firm.

In addition to having a formal mentor, junior consultants should also develop relationships with consultants throughout the firm, particularly with people who share a common area of interest or with whom they have developed a good rapport.

[For more information on the management consulting industry, download our “Guide to Management Consulting“.]

(Image Source: Flickr)

Corporate Career or Entrepreneurial Path?

corporate-career-or-entrepreneurial-path

This is a guest post from Marguerite Arnold.

I am a bit of a late bloomer in some ways – certainly academically. At the age of 48, I decided, after a life spent in business of all kinds, to go back to school, obtain my EMBA, and focus on an entrepreneurial career.

It’s not really that delaying my master’s was a choice. When I was younger, I couldn’t get a school loan. I had no cosignors. And the jobs I got never paid enough to get the loan either.

But here I am.

If I were to compare myself to any generation right now, it would not be my own but to the generation of young people currently leaving university for the first time. I have no home loan and, despite a good stint on Wall Street earning a six figure salary, all of my net worth was wiped out in the “Great Recession” along with anything like steady employment.

As a person of a certain age, not to mention a foreigner in a country where I still struggle with the native language, I have embraced the digital “gig economy” – I had to. That said, I have always been exposed to it. My parents were self-employed. My uncle was Peter Drucker – a man who wrote about corporate management – yes – but who also foresaw the situation we face now. Going to business school these days, more than ever, is about learning to manage the dichotomy between the way things were and the way things are changing.

Don’t kid yourself. The entrepreneur’s path takes a lot of practice and perseverance. It is never easy. But thinking out of the box right now is the only sure path to longer term survival. The attraction of a steady full-time job, certainly in the U.S. and the U.K., is the comfort provided by getting a pay check each week, or at the end of the month. The concept of job security though has gone out the window. The concept of a “corporate manager” is also changing fast.

As business school students contemplate the future, one thing is very clear. The old ways of doing things, along with old business paradigms, are shifting faster than the textbooks can adapt. Faster, in fact, than society can. That is always the way it has been, but this time, the shift is more profound. Companies cannot survive without acting like lean and agile start-ups, and figuring out a way to make that happen is a core priority for managers.

In some ways, deciding whether to pursue a corporate track job or jump into a start up is not a choice – just a delayed reality. Newly minted business graduates, in particular, could do far worse than reset their expectations and set their vision on leading an entrepreneurial life, right from the start.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: Copypress)

The Lessons I Learned From Peter Drucker

the-lessons-i-learned-from-peter-drucker

This is a guest post from Marguerite Arnold.

It is not like I knew Peter well – as a real live person. In fact, I only met him once – in Claremont – as a very old man. That said, I always found it rather funny and more than touching that for a man who helped chart the academic progression of American management studies, he never lost a heavy German/Austrian accent. “Zis ist Peter Drucker” – the message he recorded on his home answering machine – was a cause of much delight at one point in my life, particularly because my father spoke with an upper class English accent, and my aunt with a highly Californianized German one.

Peter was the husband of my father’s eldest sister, Doris. My father was not a fan. Apparently in my family’s frantic transition from central Europe via England and then to the U.S. during the 1930’s, the relationship between the two men became fraught with tension and personal squabbles whose original genesis was odd, to say the least. The cause of a decades long civil war apparently started over Peter’s heavy handed English language instruction to my father (then in British boarding school while Peter was a business journalist in the UK). It continued over the course of a lifetime, fuel added to the fire by envy, competition and academic success. My father thought it was fundamentally “unfair” that the End of Economic Man was published to take advantage of the announcement of the Stalin-Hitler Pact. While Peter taught at NYU, my father was at the New School. Peter followed an entrepreneurial academic path. My father a journalistic and creative one. My father also had a fundamental disgust that Drucker covered up the fact that he was Jewish. In fact, he frequently referred to my uncle as “that ugly man” and (more than once) as an “unapologetic fascist.”

Perhaps because of that, I read all of Drucker’s major works as an act of rebellion by the time I entered college (in the mid 80’s). And at that point Drucker was already being redefined, as well as slightly shelved, by the newer generation of management consultants who took his place. I also experienced his work about the “third way” by being exposed to it directly in managing a non-profit as one of my first jobs out of school. Even at the time, I thought it represented a way to redefine his voice in a way that I believe will continue to be redefined in the century “after Drucker”. He was shifting from writing about focussing on management for the manufacture of profit to management to profit society. At that point in his life he also began to believe that his work was being misinterpreted. By the turn of the century, this was much more evident, at least in private. According to my aunt, who accepted the Medal of Freedom on his behalf (because at that point he was too sick to travel), Drucker was also unbelievably embarrassed that “management by objective” had been used to justify the Iraq War.

Interpreting Drucker’s intended meaning has been, as a result, a journey that I have undertaken as part of understanding my family and myself as much as it is about management.

My perspective on Drucker started with my curiosity about why he felt that nepotism was a fundamental evil. As a child I often thought this was because of the ancient family feud between my father and my uncle.

But as an adult, my understanding became more nuanced.

Drucker was, at least in my mind, a business anthropologist. He sought to understand and explain company culture in a way that is akin to an expat trying to understand the culture of a new country. He was no less hurt than most European Jews were about being betrayed by their home countries on the basis of an intangible idea (religion). His writing about nepotism, for example, was I believe a fundamental criticism of the German “Mittelstand” and how easily companies designed for one purpose (efficient production and profit) can be perverted by politics, as happened in Europe with the rise of Hitler. Later Drucker writing on the importance of managers getting out of the way and letting employees do the work they were there to do, as well as his early interest in an IT enabled and remote working environment, was also heavily influenced by the background of a man who relied on his entrepreneurial skills and distrust of office politics to survive in a world hostile to immigrants.

By the time Drucker shifted in focus at the end of his career, he had clearly also become concerned with the way that American corporate life was rapidly undermining the stability of American society achieved after WWII. “The third way”, and his argument for the professionalization of non-profit work, was in some ways a bit of an apology for Drucker’s early celebration of corporate culture in the U.S. His writing on executive pay, for example, was clearly a reaction to the beginnings of private sector greed that has become a major political topic of our new century.

Ultimately, Drucker was a man who sought to make sense of a world caught between politics, society and culture operating within the framework of something else – the corporate structure. While the specific issues that our society is called upon to face are of course different at the beginning of this new century, I also feel that the things he wrote about have never been more pertinent and relevant.

Marguerite Arnold is an entrepreneur, author and third semester EMBA candidate at the Frankfurt School of Finance and Management.

(Image Source: Benandju)

Surviving in a Procyclical Industry

Surviving in a Procyclical Industry

(Source: Flickr)

Management consulting is a service industry that earns its keep by serving large organisations – corporate, non-profit and government.

During economic downturns these prospective clients typically have less money, or more uncertain cash flows, and so are less likely to spend money on consulting services. As a result, consultants are vulnerable to layoffs during economic downturns.

Consultants and consulting firms can go some way towards reducing the effect of economic downturns by offering a range of services including some which are counter cyclical, that is, services which are more in demand during downturns such as restructuring and turnaround support services.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

“Up or Out” Policy

Up or Out

(Source: Flickr)

It is common for top consulting firms to subject consultants to a rigorous “up or out” policy.

What this means is that consultants are required to advance to the next level of responsibility within a certain period of time or leave the firm.

Consultants normally receive regular performance feedback and so have frequent opportunities to gauge whether they are making satisfactory progress.

If a consultant is falling short, they will normally have opportunities to talk to their manager about areas for improvement and benchmarks to measure progress. If the consultant is unable to make the necessary headway within an agreed timeframe, they will normally be asked to resign. This extended resignation process is referred to as “counselling out”.

Consulting firms appear to employ the “up or out” policy for three reasons.

Firstly, consulting firms typically embrace a meritocratic culture, and so the “up or out” policy is a way of making sure that the best consultants advance within the firm.

Secondly, most consulting firms adopt a business model based on a pyramid organisational structure with a small number of partners at the top and a relatively large number of business analysts at the bottom. The only way to hire a constant flow of talented business analysts is to ensure that existing consultants are advancing upwards or leaving the firm.

Thirdly, top consulting firms value their alumni network and use it to drum up new business. The up or out policy ensures that this network continues to grow.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Consulting Roles

Consulting Roles

(Source: Flickr)

A consultant who enjoys a successful career progression within the consulting industry will be promoted up through the ranks and hold various different roles along the way. Job titles will vary by firm.

An entry level consultant may be called a business analyst or junior associate.

New recruits who hold an advanced degree (e.g. MBA, PhD, JD/LLB or MD) may start as an associate, senior associate or senior consultant. Many top consulting firms require analysts to pursue an MBA before being promoted to associate.

Consultants who perform well at associate level are likely to be promoted to manager, and will be responsible for managing projects and the day to day client relationship.

Managers who perform will be promoted to senior manager and then ultimately to partner level. Partners are responsible for building the business, forming new client relationships, and developing the firm’s brand and intellectual property.

[For more information on the management consulting industry, please download “The HUB’s Guide to Management Consulting“.]

Generalist versus Specialist

Generalist versus Specialist

(Source: Flickr)

The traditional consulting career model employed by top consulting firms like McKinsey was to develop generalist consultants who could apply general business principles and frameworks across different industries, sectors and functional areas.

Clients increasingly value industry experience and specialized knowledge, and so firms are evolving the traditional consulting career model to accommodate these changing client demands.

Consulting firms often expect generalist consultants to specialize within two or three years of joining the firm. As a junior consultant you need to be pro-active in managing your career since you can quickly become pigeonholed. For example, if your first few projects relate to “big data” you could become the firm’s in-house expert and then work primarily on projects relating to big data.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Brief History of the Consulting Industry

Brief History of the Consulting Industry

(Source: Flickr)

Executives often rely on the advice of management consultants.

Was it always this way? Where did it all begin?

The management consulting industry, as we know it, originated in America.

The very first management consulting firm was Arthur D. Little, founded all the way back in 1886 by a professor at MIT whose name was (funnily enough) Arthur D. Little.

Almost 30 years later, Booz Allen Hamilton was founded in 1914. Booz was the first management consultancy to serve both industry and government clients.

Founded in 1926, McKinsey & Company was the world’s first pure management and strategy consulting company. McKinsey is arguably the world’s most prestigious consulting firm. The culture of the firm was heavily influenced by a man named Marvin Bower, who served as managing director from 1950 to 1967. Bower believed that management consultancies should adhere to the same high professional standards as lawyers and doctors. To this day, the core guiding principle at McKinsey is professionalism.

Boston Consulting Group, arguably the world’s second most prestigious consulting firm, was founded in 1963 by Bruce Henderson. It all began when Henderson left Arthur D. Little to accept a challenge from the CEO of the Boston Safe Deposit and Trust Company to start a consulting arm for the bank.

Ten years later, in 1973, Bill Bain and others left the Boston Consulting Group to form Bain & Company, which is also one of the world’s leading consulting firms.

According to the UK Management Consultancies Association, the consulting industry in the UK began to grow quickly in the 1950s, fuelled by the arrival of the US consulting firms, a wave of new management techniques, and increased demand from clients for specialised consulting skills.

[For more information on the management consulting industry, please download “The HUB’s Guide to Management Consulting“.]

Consulting Jargon

Consulting Jargon

(Source: Flickr)

We have commented on consulting jargon before, but we will do it again.

Organisations hire management consultants to provide advice on their most challenging business problems. Senior management are busy people, and so consultants need to communicate as clearly as possible.

The need for clarity, however, has not prevented consultants from developing an industry jargon all of their own, which can sometimes be pretty incomprehensible to industry outsiders.

Below we outline some of the jargon that you are likely to come across in the consulting industry.

10,000 foot view: A high-level overview of the situation.

80/20 rule: A rule of thumb which holds that 80% of a business problem can be solved by focusing on 20% of the issues.

Add some color: Make it more interesting/appealing/persuasive.

Adding value: Making a contribution.

AOB: Stands for “any other business” and might be used in a meeting agenda to block out time for miscellaneous discussion.

At the end of the day: A consultant may use this phrase before summarising the main thrust of her argument.

B2B: Stands for “business to business” and indicates that a business is aiming to sell to other businesses rather than to end consumers.

B2C: Stands for “business to consumer” and indicates that a business is aiming to sell directly to consumers rather than to other businesses.

Bandwidth: Capacity to take on additional work commitments. For example, “I don’t have any bandwidth this week”.

Big 3: McKinsey, Bain and BCG.

Big 4: Deloitte, EY, KPMG, PwC.

Boil the ocean: Go overboard; undertake an excessive amount of analysis; fail to follow the 80/20 rule.

Buckets: Categories.

Buy in: Agreement; support. For example, “we need to get buy in from the client before finalising the report”.

CAGR: Compound annual growth rate.

Charge code: A unique code provided for a project which can be used to record work-related expenses.

Circle back: Follow up with someone at a later point in time.

Close the loop: Completing an item on the agenda or topic of discussion with everyone being in agreement.

Core client: A client that has a long-standing relationship with the firm.

Deck: PowerPoint slides.

Deep dive: To conduct an extensive examination of a particular issue.

Deliverable: Work product that a consultant needs to provide to her manager or the client as part of a client engagement.

Development opportunity: A professional shortcoming or area for improvement that requires attention.

Due diligence: Comprehensive examination of all relevant issues, such as a review of the client’s business or industry.

Elevator pitch: A short persuasive summary of a proposal, which leaves the listener wanting to know more.

Fact pack: A pack of information that provides the essential facts for a project/industry/company.

Granular: Focusing on the finer details, as in “this analysis needs to be more granular.”

Hard stop: A stated time after which the person will no longer be available to continue the meeting/discussion. For example, “I have a hard stop at 3 o’clock”.

Key: Critical; essential; required; important; central. For example, “the key issues are X, Y, Z.”

Let me play this back: Words used before providing a summary of the discussion from the listener’s perspective. This is a helpful technique which can allow a consultant to clarify her understanding of the key issues and at the same time sound intelligent by saying something even if the summary adds no additional insights.

Leverage: Make use of.

Low hanging fruit: Targets that are easily achievable, issues that can be quickly resolved, opportunities that can be readily exploited, or problems that are simple to solve. By picking the low hanging fruit first, consultants can demonstrate quick results, which can boost client confidence in the project and help build initial momentum.

Lots of moving parts: Complex.

Managing upwards: Providing feedback to more senior employees.

MBB: McKinsey, Bain and BCG.

MECE: Pronounced “me see”, and stands for “mutually exclusive, collectively exhaustive”. It is a principle developed at McKinsey for grouping information into distinct categories which, taken together, deal with all available options.
On the beach: In between assignments. Time spent on the beach may be spent in training or used for new business development.

On the same page: See things from the same perspective.

Opportunity cost: What you give up in order to pursue an opportunity; the value of the next best alternative.

Out of the box thinking: Lateral thinking; coming up with new ideas which don’t follow neatly from the data.

Ping: Contact someone, as in “I will ping you later via email.”

PIOUTA: Pulled it out of thin air.

Pipeline: Current and upcoming client engagements.

Production: A department of the consulting firm (often outsourced) that assists in producing material needed for presentations and meetings.

Pushback: Resistance or disagreement, as in “we received some pushback from the client.”

Right size: Downsize.

Sandwich feedback technique: A structure for providing feedback that resembles a sandwich – one positive comment, followed by a piece of constructive feedback, and ending with a positive comment.

Scope: Agreed set of deliverables for a client engagement.

Scope creep: When the client adds, or tries to add, additional deliverables which were not agreed in the initial project brief.

Sniff test: A common sense check of a particular idea, proposal or analysis.

SWAG: Some wild-ass guess.

Take the lead: Take responsibility for something, as in: “Why don’t you take the lead on this project.”

Takeaways: The key points that should remembered at the end of a discussion or meeting.

Touch base: To meet at a certain time to talk about the project.

Up or out: Many top consulting firms employ an “up or out” policy. Employees are expected to advance up to the next level of responsibility or they will be counselled out of the firm.

Work stream: The tasks that make up a project.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Consulting or Banking

Consulting vs Banking

(Source: Google Images)

If you are a high achieving undergraduate or MBA student, then you are likely to be considering various highly paid and prestigious career options.

This post provides you with a high level comparison of management consulting and investment banking.

1. Nature of the job

Management consultants assist organisations by providing advice to address specific problems and to improve organisational performance.

Investment banks help companies raise money for various purposes including investment, acquisitions, and provision of working capital. They do this by selling stocks and bonds to public investors. Within an investment bank, the work is split into many roles including investment banking, sales and trading, equity research, risk management, operations, and technology.

People in the “investment banking” or “corporate finance” division typically help large organisations undertake merges and acquisitions. This is a front office role and normally the most prestigious and highest paid role at an investment bank.

People in the “sales and trading” division buy and sell financial products. Sales people communicate with investors to sell financial products. Traders buy and sell securities with the bank’s money with the aim of making money for the bank.

People in “equity research” review listed companies and provide buy/sell recommendations. Investment banks employ “sell-side analysts” while investment funds employ “buy-side analysts”. The research division will provide reports to the sales and trading division to inform trading activity and provide ideas to help sell financial products. The research division may also provide research to clients in the hope that they will execute trades through the bank’s sales and trading division.

Risk management is a middle/front office role which assesses the market or credit risk assumed by the bank or its clients in a particular transaction. Prior to the 2008 financial crisis the views of the risk management division in most banks were overlooked in favor of the short term profit opportunities pursued by the investment banking division (this may or may not still be the case).

Investment banks also employ people in a range of back office roles including operations and technology.

2. Salary

For fresh graduates, the base salary for investment banking is typically similar to the base salary for management consulting. However, in good years bankers typically get an end of year bonus in the range of 50% to 100% of base salary. Consultants may also receive an end of year bonus, but it will be much smaller, around 10% of base salary.

Salaries will vary by country and over time.

Below are some average base salary and bonus figures for new analysts drawn from Glassdoor for 2014/2015.

Consulting or Banking

In general, adjusting for experience level, bankers will earn more than consultants.

While there are many factors to consider when charting your career direction, if money is a deciding factor for you, then banking may be the way to go.

3. Lifestyle

Hours: Banking work hours can average 10 to 18 hours per day, while consulting work hours average around 12 hours per day.

Work hours in both industries will vary depending on various factors including client demands, the eccentricities of your boss, and where you find yourself in the deal/project lifecycle.

Travel: Bankers sometimes do roadshows to drum up support from investors, but will typically spend 90% of their time in the office.

In stark contrast, it is normal for consultants to travel up to 80% of the time.

Work culture: Consulting firms typically have a professional and collegial atmosphere where an intense client focus is combined with networking and professional development opportunities.

In comparison, investment banks are competitive and hierarchical. It is not uncommon for bosses to yell at staff for mistakes, and colleagues are less likely to lend a helping hand since everyone is competing for the same bonus pool.

4. Exit Opportunities

Consulting offers many exit opportunities including industry, academia, government and entrepreneurship. Top consulting firms make a point of keeping current employees in touch with alumni, so there are likely to be many firm sponsored networking events.

Investment banking is an excellent starting point for future careers in the finance industry including private equity and hedge funds, although less helpful if you want to pursue non-finance related exit opportunities.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Is Consulting For You?

Is Consulting For You

(Source: Flickr)

Management consulting is a nice perch, but it is not for everyone.

Many people go into consulting with a plan to gain a few years of experience and then apply for B-school or pivot into industry or entrepreneurship. This is a legitimate strategy, but it can also be a cop out with many people leaving their career direction too much to chance.

The sooner you figure out what you are passionate about, the better.

One of the reasons that many applicants are attracted to the consulting industry is that consultants travel with work.

Travelling sounds like fun, but travelling for work can be a double edged sword. Constant travel, lonely hotel rooms, and an inability to plan time with family and friends can be disruptive and exhausting. Different consulting firms have different travel policies, and if travel is an important factor for your decision then look into this before applying.

Consulting is not for everyone, and one reason is that consultants work hard to provide valuable recommendations but tend not to see the fruits of their labor. Consultants often leave a client prior to implementation. For people who enjoy seeing projects through to completion, this can be unsatisfying. Clients also tend to take the credit for positive outcomes and blame consultants if things go wrong. As New York based consultant Alan Weiss would say, “If you want to be loved, get a dog.”

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Required Consulting Skills

Required Consulting Skills

(Source: Flickr)

The consulting industry provides many services and covers many industry sectors, and so the domain knowledge and expertise that a consultant needs will vary depending on the industry focus and services that the consultant actually provides.

That being said, there are some generic skills that every consultant will need to have.

As a starting point, every consultant will need to be intelligent and energetic to cope with client expectations, a relentless travel schedule and demanding deadlines. Consultants will also need to enjoy learning since no two consulting assignments are the same. Consulting firms screen heavily for intelligence and enthusiasm during the application process. If you are not smart and energetic then breaking into and succeeding in the consulting industry may be an uphill battle.

Skills Required By Junior and Mid-level Consultants

Assuming a consultant has sufficient aptitude and the right temperament, there are also a number of generic skills that junior and mid-level consultants require, outlined below.

As you read through the list, be honest with yourself. Do you possess these skills? You don’t need to be perfect on day one, but your time is valuable and pursuing a career in consulting will be challenging if you are not well prepared.

Which areas do you need to work on?

  1. Communication skills – Consultants work in many different service areas and industry sectors. Where ever a consultant may find herself, she will need to be able to communicate clearly and persuasively. Consultants need to be able to collect information from employees, obtain client buy-in, ensure that the proposed solution is feasible, and present recommendations to senior management.
  2. People skills – Consultants work in teams and often deal with the client’s senior management team. As such, consultants need to be agreeable and pleasant to work with as well as assertive and able to influence outcomes.
  3. Quantitative skills – Consulting firms screen applicants in the interview for their quantitative skills using market sizing and maths questions. It is important for consultants to be comfortable working with numbers and using programs like Excel. Some people are better at maths than others, but all applicants can improve their maths skills through dedicated practice.
  4. Analytical skills – Consultants need the ability to collect and synthesize large amounts of information, develop a hypothesis about the client’s problem, analyze the data to uncover insights, and come up with a set of recommendations. In short, consultants require strong analytical skills.
  5. Organisational skills – Consulting assignments can be fast paced, multifaceted and chaotic, and consultants are sometimes staffed on more than one assignment. Consultants without strong organizational skills are likely to flounder.
  6. Initiative – Consultants need to be able to identify issues and take action without supervision, and to know when to ask for help. A consultant will sometimes be sent to work independently at the client site, and should be able to represent her consulting firm and make a favorable impression with the client.

Skills Required By Partners

With good core skills and a strong performance record a consultant can get promoted through the ranks. However, once she approaches partner level a consultant will also need strong sales and marketing skills if she wants to be able to sell high priced consulting services and enjoy continued success at partner level.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

What Do Consultants Do Each Day?

What Do Consultants Do Each Day

(Source: Flickr)

Consultants work on projects of varying lengths, and are often required to travel to work on site with the client.

The specific tasks that a consultant undertakes will depend on which firm she works for, the project requirements, as well as her level of seniority and experience.

Projects typically follow a predictable cycle which involves five stages: pitching, hypothesis generation, research and analysis, reporting, and implementation.

1. Pitching

Pitching involves selling the firm and its consultants to prospective clients, and includes not only sending the final proposal but also conducting industry research, investigating prospective clients, and making sales calls. Much of the pitching process at consulting firms is handled at partner level.

Consultants who are “on the beach” (that is, not staffed on a client project) may spend time researching prospective clients and supporting the firm’s marketing and business development efforts.

2. Hypothesis Generation

Prior to commencing any research or analysis, most consulting firms start by developing a case hypothesis about the specific business problem that needs to be solved. This may require a few days of brainstorming involving the consulting project team and members of the client organisation.

3. Research and Analysis

The consulting team will perform research and analysis to test its case hypothesis. This may involve gathering information from the client, conducting market surveys, attending client meetings, interviewing employees and building quantitative models.

The consulting team will use its research findings to uncover insights and develop a set of recommendations.

4. Reporting

The consulting team will usually communicate with the client organisation throughout the project at various intervals: daily, weekly, monthly.

The purpose of ongoing communication is to keep the client informed about the evolving hypothesis, get buy in about key assumptions, and make sure the consulting team is on track to meet client expectations.

The consulting team will often conclude its project by delivering a final report accompanied by a polished PowerPoint presentation.

5. Implementation

Providing recommendations is often not the end of the story, and clients often engage consultants to help implement the recommendations produced by the consulting project. Depending on the nature of the project, implementation may involve project management, software development, systems integration and testing, or post-merger integration.

[For more information on the management consulting industry, download “The HUB’s Guide to Management Consulting“.]

Types of Consulting

Types of Consulting

(Source: Flickr)

There are many different types of consulting.

As an aspiring consultant, you would be well advised to understand your options so that you can make an informed decision about which kind of consulting is right for you.

Here are five (5) of the main types of consulting that might interest you:

  1. Strategy: Think BCG, McKinsey and Bain (although it is worth noting that these firms are doing less and less “pure” strategy work and more operations, implementation and restructuring). Strategy consulting is the kind of consulting that you probably think of when people say “management consulting”. Strategy consultants work with the CEO and senior management to address strategic problems including declining profitability, growth strategy, market entry, product development, or responding to a competitive threat.
  2. Operations: While strategy consultants give recommendations about what a client “should” do, operations consultants help clients actually improve existing operations. Operations consultants might work on projects relating to supply chain management including streamlining procurement or improving manufacturing efficiency.
  3. Information Technology: In an increasingly competitive digital world organisations are increasingly looking for digital solutions. IT consultants work with the CTO and senior management to develop software solutions to improve efficiency and organisational performance.
  4. Human Resources: For many firms wages are their biggest expense and people are their biggest asset. HR consultants help organisations attract, select, train, compensate and assess employees.
  5. Economic: Economic consultants normally work with government and law firms to provide economic forecasts and expert evidence based on statistical analysis and econometric models.

[For more information on the management consulting industry, download our “Guide to Management Consulting“.]

What is Consulting?

What is Consulting

(Source: Flickr)

“Consulting” is a pretty general term, and doesn’t really give you a clear idea of what consultants actually do.

The Oxford dictionary indicates that “to consult” means to “seek information or advice from someone (especially an expert)”.

In other words, consultants are people who provide expert advice.

We are interested mainly in the consultants who provide advice to organisations (corporate, non-profit and government). They are typically employed by management, and hence they tend to be called “management consultants”.

In general terms, management consulting involves providing advice to organisations with the aim of helping to improve organisational performance or solve specific business problems.

Consultants can perform a wide range of tasks including framing a business problem, synthesizing large amounts of data, undertaking research, interviewing employees, developing recommendations, and presenting findings to senior management.

Consultants can work in a wide range of industries including automotive, CPG (consumer packaged goods), chemicals, defense, electronics, financial services, healthcare, infrastructure, logistics, media, mining, oil & gas, pharmaceuticals, private equity, retail, social sector, technology, telecommunications and tourism.

Consultants can also provide many different services including growth strategy, pricing, marketing, supply chain optimization, software development, human resources management and economic forecasting.

Large full service firms like Deloitte, PwC and KPMG typically provide a wide range of consulting services across a broad range of industries. While smaller consulting firms often specialize in providing advice in a particular service area or to a specific industry.

[For more information on the management consulting industry, please download “The HUB’s Guide to Management Consulting“.]

A Career In Management Consulting

A Career in Management Consulting

(Source: Flickr)

Consulting is an appealing career choice for many graduates.

Consultants have the potential to travel with work, network with Fortune 500 executives, earn six figure salaries, develop high-level transferable business skills, and benefit from lucrative exit opportunities.

What’s not to like?

Well, for all its benefits, the life of a consultant is not necessarily a bed of roses.

Consultants can be placed under a lot of pressure, required to work extremely long hours, spend endless nights in lonely hotel rooms, and face the continual threat of redundancy either due to an economic downturn or the firm’s ‘up or out’ policy.

Before you embark on a career in management consulting, it is worth taking some time to understand the consulting industry and whether the requirements of the industry are likely to be a good fit with your personality and goals for the future.

[For more information on the management consulting industry, please download “The HUB’s Guide to Management Consulting“.]

How To Deal With Rejection

Dealing with Rejection

(Source: Flickr)

If you have gone through the consulting interview process and are not offered a position with your target firm, then you should find out why.

There are two reasons this is important.

Firstly, getting specific feedback on your performance is the only way you can learn and improve.

Secondly, you may discover that the firm has formed an inaccurate opinion of you.  It is usually impossible to transform a rejection into an offer, but you really have nothing to lose.

If you believe that you were very close to getting an offer, then you may want to try proposing a compromise. You could offer to work for free, or on a trial basis rather than in a permanent full time position.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Negotiating An Offer Of Employment

Negotiating An Offer Of Employment 3

(Source: Flickr)

If you have received an offer of employment from the consulting firm of your choice, you may still want to negotiate the terms of the offer.

How should you go about doing this?

Use your bargaining power

Your ability to negotiate the terms of your offer depends on how much bargaining power you have. The consulting industry is currently experiencing growth in various markets, and so it may be possible to negotiate a more favorable employment contract.

Whatever the state of the economy, it is worth considering negotiating the terms of your offer. After you accept your offer of employment you will have virtually no bargaining power, and so the time for negotiation is beforehand.

If you are friendly and businesslike then negotiating needn’t create a negative impression, on the contrary, it demonstrates that you have a keen business sense and a healthy level of self confidence.

Obtain written confirmation

You need to obtain written confirmation of all terms that you successfully negotiate.

Terms to negotiate

There are a number of offer terms that you may want to negotiate, these include:

  1. Office location;
  2. Start date;
  3. Compensation;
  4. Starting position;
  5. Annual leave; and
  6. Offer response deadline.

1. Office location

To negotiate a change of office location, a first step might be to explain the reason for your request to the recruitment manager. If they agree to look into the matter, make sure you agree on a date to follow up with them.

If your request is turned down, try to identify a person in your target office who can vouch for the transfer. When you find someone, contact them to explain your situation and ask if there’s anything he or she can do to help you. Offer to meet with them in person.

2. Start date

In a weak economy, you may be able to negotiate a later start date. This benefits the firm by allowing them to start paying your salary later than planned.

3. Salary and bonus

Given the strong growth of the consulting industry, it may be possible to negotiate an improved remuneration package.

The best form of leverage is to have another offer that pays more money. If you are an MBA or lateral hire and your previous salary was higher then you can use this as leverage. You may be able to convince the recruiter that you are being undervalued.

4. Starting position

If the job offer is for a position at a lower level than you believe is justified given your qualifications and experience then you can ask for higher starting position. If this doesn’t work, then you might want to ask for a shorter performance review period, which will allow you to prove yourself and get promoted sooner.

5. Annual leave

If you don’t like the amount of annual leave provided, then you might want to try asking for more. If that fails, ask about the firms unpaid leave policy.

6. Offer response deadline

Consulting firms are in a war for talent and can sometimes give applicants an “exploding offer”, which expires within a very short time period.

Exploding offers are designed to pressure applicants to accept an offer as soon as possible in order to minimise the risk that the applicant accepts a more favourable offer from another employer.

If you need an extension to the offer deadline, ask for it. It’s a very common thing to get more time to make a decision.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Accepting An Offer Of Employment

Accepting An Offer Of Employment

(Source: Flickr)

If you are offered a position with a consulting firm (and are happy with the terms of the offer) then feel free to accept it.

You can talk to the recruitment management to let them know your decision, and you will also need to sign, date, and return a copy of the offer letter.

Be sure to make a copy for your records.

If you have successfully negotiated any terms of the offer, then you need to capture the additional or amended terms in writing.

Ideally the firm should provide you with an updated offer letter reflecting the agreed terms of the offer.

However, the recruitment manager may conveniently forget to provide this, in which case you should set out the agreed terms in an email and send it to the recruitment manager.

The firm may try to wriggle out of its obligations later, and so you need to have written evidence of what was agreed.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

After The Interview

After The Interview

(Source: Flickr)

We have talked at length all year about consulting interviews, and in this post we provide three (3) thoughts on what to do after the interview comes to an end.

  1. Confirming the next step: To find out about the next step in the recruitment process, talk to the recruitment manager (this will probably be someone other than your interviewers).
  2. Thank you email: It is a nice courtesy to send a short thank you email to your interviewer the day after your interview. The note should thank the interviewer for her time, remind her of a few key points that you discussed, and state again why you are genuinely interested in working with the firm.
  3. Following up: If the date on which you expected to hear back from the firm has passed, then feel free to call the recruitment manager to follow up on the status of your application.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Practice Case Questions

Practice Case Questions

(Source: Flickr)

If you want to practice case questions, I highly recommend Marc Cosentino’s book Case in Point.

You can also access sample case questions from various consulting clubs here, and from the following consulting firm websites:

  1. McKinsey & Company;
  2. Bain & Company;
  3. Oliver Wyman;
  4. Deloitte;
  5. A.T. Kearney;
  6. Accenture; and
  7. L.E.K. Consulting.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Product Market Expansion Matrix

Product Market Expansion Matrix

(Source: Flickr)

The product-market expansion matrix may prove useful in the consulting case interview and is relevant when considering growth strategies. It might be used on a standalone basis or as part of a larger profitability framework.

Product Market Expansion Matrix

There are four ways that a company can pursue growth:

  1. Market penetration: A strategy to increase sales to existing customers and increase market share. Market penetration can be pursued through a combination of initiatives relating to pricing, product, placement and promotion (see “Four P’s Framework”).
  2. Market development: A strategy to sell existing products to new markets which might include new regions, customer segments, or distribution channels.
  3. Product development: A strategy to sell new products to existing customers to increase share-of-wallet.
  4. Diversification: A strategy to develop new products for new markets. This is the highest risk option, and so it will make sense to look for markets with strong market growth and high levels of industry attractiveness (see “Porter’s Five Forces”).

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Outsourcing Matrix

Outsoucing Decision Matrix

(Source: Flickr)

The outsourcing matrix may prove useful in the consulting case interview, either as a standalone framework or as part of a larger profitability framework.

With the view to reducing costs, there are three questions that a firm would do well to consider:

  1. How long will it take to reduce major cost drivers?
  2. Are the activities strategically important?
  3. To what extent do the activities contribute to operational performance?

Outsourcing Matrix

A company will want to eliminate or outsource costly activities that have low strategic importance. If the activity has a low contribution to operational performance it can be eliminated, and if it has a high contribution to operational performance it should be outsourced.

A company will want to retain control of activities that have high strategic importance. This can be done by pursuing business as usual or by forming a strategic alliance or increasing efficiency.

Common cost reduction techniques include:

1. Procurement

  • Consolidate procurement or renegotiate supply contracts.

2. HR Management

  • Reduce labour costs through decreasing salaries, training, overtime, benefits and healthcare, introducing employee stock ownership, and right sizing.

3. Technology Development

  • Use IT and digital technology to reduce communication and organisational costs.
  • Employ more advanced production technology.

4. Logistics

  • Partner with distribution companies (e.g. FedEx).

5. Operations

  • Outsource manufacturing to a lower cost jurisdiction (e.g. China/India/other).
  • Improve the utilisation rate of plant, property and equipment.
  • Relocate headquarters to lower cost city, region or country.

6. Finance

  • Reduce working capital including inventory and accounts receivable.
  • Refinance outstanding debt.
  • Divest non-core assets.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

McKinsey 7 S Model

McKinsey 7 S Framework 2

(Source: Flickr)

While you may not directly use the 7 S Model in the consulting case interview, it will give you a deeper understanding of how to examine the inner workings of an organisation, identify strengths and sources of competitive advantage, as well as weaknesses and reasons why an organisation may not be operating effectively.

The 7 S Model can also provide a guide for organisational change.

McKinsey 7 S Model

The seven (7) factors considered by the 7 S Model include:

  1. Shared values refer to the values that are widely practiced within an organisation and form the company’s core guiding principles.
  2. Strategy refers to the plans that a company has for gaining a competitive advantage (e.g. low cost; product differentiation; new product development; entering new markets).
  3. Skills refer to the competencies of the organisation, its staff and management.
  4. Structure refers to the way in which an organisation’s people and business units relate to each other. This includes organizational structure, communication channels, and chain of command.
  5. Staffing refers to recruitment, selection, training, development, and management of talent.
  6. Style refers to the work culture, leadership style of upper management and the way things are done.
  7. Systems refers to the organisation’s processes and procedures for things like budgeting, communication, recruitment, compensation, and performance reviews.

[For more information on the consulting interview, download “The HUB’s Guide to the Consulting Interview“.]

BCG Growth/Share Matrix

Cash Cow

(Source: Flickr)

While it may not be a core framework for solving consulting case questions, the BCG Growth Share Matrix can help to broaden your understanding of how a company might want to allocate cash between products and business units.

The framework is based on the idea that the amount of cash a product uses is proportional to the rate of growth of that product in the market, and the generation of cash is a function of market share.

To be successful, the story goes, a company should have a portfolio of products with different growth rates and different market shares. Money generated from high-market-share products can then be used to develop high-growth products.

BCG Matrix

Under the BCG matrix, products are classified into four types:

  1. Stars are leaders in high growth markets. Stars grow rapidly and therefore use large amounts of cash. Stars also have a high market share and therefore generate large amounts of cash.
  2. Cash Cows are highly profitable and require low investment because they are market leaders in a low-growth market.
  3. Question Marks are low market share high growth products, and almost always require more cash than they can generate.
  4. Dogs are low market share low growth products. BCG refers to these products as “cash traps”. They require little cash but also generate little cash.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

How to Attend Conferences as a Businessperson

How to Attend Conferences as a Businessperson

(Source: Cydcor)

This is a guest post from Archie Ward.

Take responsibility for getting the most value out of the next conference you attend.

By planning ahead and thinking strategically, a conference can generate sales, increase business, improve vendor relationships and initiate strategic partnerships. Going to a conference can renew excitement about the business, open up new avenues for the future and create lasting connections.

Five Reasons to Go to a Conference

  1. There is the possibility of face time with people you might not normally get to meet
  2. You can meet clients you may not have seen face to face
  3. You could learn something
  4. Catch up on the latest trends and get great new ideas
  5. Evaluate potential vendors

Before the Conference

Most conferences have cocktail hours and dinners as well as exhibits, classes and keynote speakers.

Start by setting some goals for the conference. Plan to increase business, to initiate partnerships, work with vendors, or meet the competition. Try to be someone who’s meeting a lot of people, and doing it well.

Study the conference brochure, ask the conference sponsors for a guest list and mark the events and classes it makes sense to attend by thinking about whether or not your vendors, stakeholders or customers might be present. Make a list of the clients, vendors, stakeholders or potential partners you want to see and call ahead to schedule a meal with them.

Use your planner to lay out your meetings, events and classes so you attend to all of your conference goals. Sometimes conversations are more valuable than classes. A one on one dinner may be better than the banquet. Choose wisely and plan for some down time to address opportunities that present themselves at the conference.

Prior to the conference, create any materials or electronic presentations that may be needed for the discussions you plan to have. Take business cards and prepare your elevator pitch. Make sure to dress the part. It is quite difficult to get new business from a potential client in a sweat suit unless you’re dealing with Nike.

At the Conference

Upon arrival, hang out in the registration area. It is a great place to run into the people you want to see but couldn’t book and those you didn’t expect to meet. It’s a great opportunity to start conversations and set up longer ones. Be armed with some information about your company’s latest innovations or new services.

Watch name tags and look for opportunities. Get to sessions a few minutes early and leave a few minutes early to maximise the time you spend connecting to clients, potential clients, vendors or stake holders. Select high quality contacts who may offer value. Hang out in the host hotel and observe where others are gathering. Be available during the cocktail hour and seat yourself strategically at meals. There is plenty of time to hang out with your cronies, so seek out time to be with business people you haven’t met.

If you make it to all the meals you set up, have good conversations with connections, and attend some of the higher quality classes, you have done well. You probably will have accomplished your goals.

After the Conference

While at the conference you should have been taking notes on all of the business people you met, and collecting their contact information. Hopefully you have set up some future calls and meetings with at least of few of them. Send notes to everyone you had contact with. In the note bring up a topic of interest that you discussed. Then send reminder notes to everyone you set up meetings with or plan to call to confirm the meetings and calls. Send notes to anyone you missed and set up a plan to get in touch in the near future.

If you are well-planned and armed with goals attending a professional conference can help you improve business, create relationships, check out the competition and evaluate vendors. They provide a great opportunity for new information and new relationships.

Archie Ward is a business consultant and social media strategist. Archie splits his time each year between Asia and Australia. While he is hard at work helping other people make their businesses successful, he hopes to launch his own by year end.

Value Chain Analysis

Value Chain Analysis 2

(Source: Flickr)

Value Chain Analysis is another tool that may prove useful during the consulting case interview. It can be used to analyse the cost structure of a company as part of a declining profitability case, or to analyse the supply chain as part of an operations case.

Value Chain

To understand which activities provide a company with a competitive advantage, either through cost advantage or product differentiation, it is helpful to separate operations into a series of value-generating activities referred to as “the value chain”.

Value Chain Analysis involves identifying all of the important activities in which a company engages and then determining which ones give the company a competitive advantage. By doing this, a company can:

  1. Determine which activities are best undertaken internally and which ones are able to be outsourced or eliminated;
  2. Identify and compare strengths and weaknesses with the competition; and
  3. Identify synergies between activities.

The primary value chain activities include:

  1. Inbound Logistics: Receiving and storing raw materials;
  2. Operations: Manufacturing products and services; the way in which inputs are converted into final products;
  3. Outbound Logistics: Inventory storage and distribution to customers;
  4. Marketing & Sales: Identification of customer needs and preferences, marketing and sales generation;
  5. Service: Interacting with and supporting customers.

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Four P’s Analysis

Four P's Framework

(Source: Flickr)

Four P’s Analysis is a framework that may prove useful for solving consulting case questions.

It can be used to evaluate the marketing strategy for a product.

1. Price

The pricing strategy that a company employs will affect its market share and profitability. There are three key pricing strategies to consider.

  1. Competitive pricing: How do prices compare with the competition? Is the pricing appropriate given the product’s quality and relative position within the market?
  2. Cost based pricing: What is the company’s cost structure? What percentage of costs are fixed and variable? A company that has high fixed cost and low variable costs will benefit from economies of scale and so may want to lower prices to increase market share.
  3. Value based pricing: Is the product a commodity or differentiated? Do different customer segments have a different willingness to pay? Are customers price sensitive (see “Price elasticity of demand”)? If prices are changed, how will this affect sales volume and product perception?

2. Product

Is the product a low cost commodity or differentiated? Products can be differentiated where they differ in quality, features, availability or branding.

How does the product compare with what the competition is offering? Are their viable substitutes? Do customers face high switching costs?

3. Promotion

How does the company promote its products (advertising, direct sales, indirect sales, trade promotions, public relations)? Is the company reaching its target customers? Can the company afford to increase its marketing budget?

Understanding the customer’s buying decision process can help a firm decide where to influence the customer’s purchase decision.

Customer Buying Process

4. Place

What markets and market segments does the company serve? How does this compare to the markets and market segments served by the competition?

What distribution channels does the company use to get products to the customer (mail order, online store, factory outlet, retail store, supermarket, department stores, or network marketing)?

Are existing channels consistent with the company’s overall strategy? Are there other channels that the company could use?

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Rewarding Your Most Valuable Clients

Rewarding Your Most Valuable Clients

(Source: reynermedia)

This is a guest post from Archie Ward.

Many business people do not know how to bond with their clients. This is because the majority of such individuals struggle to find time to enjoy themselves. If you are such an individual, then there are things you can do to help you bond with your clients and strengthen your relationship with them. You could, for example, reward them with an end of year event.

Organising such an event can be valuable for three (3) reasons:

  1. Word of mouth – If your event is fun, memorable and worth talking about, then your top clients can become your greatest ambassadors as they spread the word about the experiences they had at your remarkable event.
  2. Networking – Not only can your clients benefit from the event itself, but also from the valuable contacts that they might meet there. By creating an opportunity for your contacts to meet each other, you offer them additional value by helping them to build their network. This can help to enhance your business authority and to solidify your position at the center of their professional network. This increases the chances that they will refer business to you and reach out to you for assistance in future.
  3. Trust based relationships – While your clients may pay you for the products and services that you provide, they are likely to take other factors into account when making their purchase decision. Think of your end of year event as an extension of your customer service and relationship building efforts. By demonstrating to your clients that you value them this can help to establish trust and enhance the relationship that you have with them. Your clients are likely to give you more business if they know you, trust you and like you.

Here are nine (9) suggestions for your next end of year event.

1. Host a wine dinner

Whether it is at your home or another location, hosting a wine dinner is a great idea to bond with your clients. Pairing the wine selections with food from the same locality can help to make the event special, and inviting a wine expert as the keynote speaker for the event can help to make the event even more memorable and remarkable. It is a great way to leverage your customer’s passion for wine to inspire conversation and build common bonds.

2. Captain the ship

Several hours on a yacht in a big city like Chicago will set you back around $1,200. However, the benefit of renting a large vessel is that it will allow you to bring many clients together. The clients will be talking about the event in the future and they will be more inclined to renew their contracts with you.

3. Get physical

If you excel at a sport in which amateurs can participate, then make use of it. Bonds made during physical activity are quite powerful. You can take your customers hiking or road biking. Having a coffee shop on the route (or a drinks stop at the finish line) can help to soften the physical toll.

4. Give back

Another great option for an end of year event is to invite your clients to an event for a charity that you support. Charity galas offer high-quality bonding time over cocktails, and the tickets are usually tax deductible. This can allow you to show your clients that you are passionate about things apart from business.

5. Make a short movie

Creating videos for your customers is not as hard as you might imagine. There is an application on YouTube known as ‘Search Stories’. The clips are a combination of entertainment and sales pitch. The videos normally take about ten minutes to make. It is a good starting point for further discussion or conversation with a client.

6. Organise ‘meetups’

This particular activity is best for younger executives and clients. One great idea is to invite people to spend a weeknight at a bar. Let your guests spread the word over social media and offer anyone who tweets about the occasion a free drink of their choice. There is a high possibility of getting a large crowd of current and new younger clients for your business.

7. Know the owner

You can spice up a dinner, lunch or drinks event by introducing your client(s) to the owner. Having the owner of a popular yet stylish establishment come over to serve you or provide food recommendations will impress your clients and show them that you are well connected.

8. Deliver treats

By sending tasty treats to the staff of your clients you can make them happy and keep your business front of mind. Examples of things to send might include pizzas on a Friday afternoon or an ice cream truck during the summer months. When your clients remember such occasions and talk about them, they help to build your brand.

9. Award Badges of Honor

People like to show off and prove that they are part of an exclusive club or that they managed to complete a particular challenging event. By providing your most valuable clients with recognition (for example, by providing t-shirts, concert tickets, awards or certificates) you remind them of the valuable business relationship that exists between you.

Archie Ward is a business consultant and social media strategist. Archie splits his time each year between Asia and Australia. While he is hard at work helping other people make their businesses successful, he hopes to launch his own by year end.

Have An Idea?

If you are subscribed to this blog, then you either have an interest in management consulting, a passion for strategic thinking, or you just love reading along to see what I might come up with.

This blog is invariable upbeat (with the exception of yesterday’s post, which was an unfortunate diversion, and comes with my apologies).

But as you read this blog you may have found yourself thinking one of the following:

  1. I knew that;
  2. I have a better idea; or
  3. Tom doesn’t know what he’s talking about.

All of these criticisms could apply from time to time (despite my best efforts to inform, delight and motivate).

And so, this leads to the obvious question: do you have an idea that you would like to share with over 2,000 smart people?

If you are interested in writing a guest post, I would love to hear from you.

You don’t need to write a lengthy tome; an article which is between 50 and 1,000 words in length would do the trick nicely.

If you are interested in writing an article, please send me an email now (tom [at] spencertom [dot] com).

I look forward to hearing from you.

Navigating Business Partnerships

Navigating Business Partnerships

(Source: 드림포유)

This is a guest post from Archie Ward.

Business partnerships can be an integral part of start-up success and growth of a new venture. If properly implemented and executed, partnerships can be an effective way to grow your enterprise without having to implement time consuming and difficult changes or having to make costly investments.

Each partner brings expertise and assets which can help to increase your market share and competitive advantage. However, just like marriage, business partnerships can be difficult and getting out of one can be messy.

The winning strategy is to ensure that you conduct due diligence prior to getting into a partnership. If you are starting a partnership and wondering how to navigate through these murky waters, consider the five (5) pointers below.

1. Don’t rush into it

The adage “fools rush in” was never truer than when it comes to business partnerships.

Cash-strapped entrepreneurs will often stop exploring their options as soon as they find a person who can write them a big check, but it is important that you don’t overlook potential opportunities.

Remain uncommitted and stay flexible until you have explored your options. Cultivate your alternatives actively and do not be too quick to ignore potential business partners. Take time to compare the relative benefits and disadvantages of every alternative. And at the end of the day, ask yourself, “is this the best option for my business”?

Take time to calculate the opportunity costs of entering into a business partnership, and remember that you will also assume any liabilities of the partnership.

2. Don’t overlook the importance of shared values and integrity

Your values and those of your business partners need to be aligned.

A potential business partner may be extremely smart or have a proven track record, but they may also have engaged in shady business deals to get where they are.

If you enter into a partnership with someone who has no regard for ethics and integrity then you can expect strife. Many big businesses (think Arthur Andersen) have come undone as a result of engaging in unethical practices.

3. Have an exit strategy

Having an exit strategy is not jinxing your business, it’s just good common sense.

The reality is that conflict is inevitable, and you can never predict how severe a conflict might get. By putting measures in place ahead of time you can help to ensure that you are not the loser if things head south.

While the partnership may not disintegrate, better opportunities may emerge, and so you need to have an exit strategy that will allow you to change with the times.

How will the partnership assets be shared in the event that the partnership is dissolved? What happens if a business partner dies?

When considering your exit strategies you need to consider all of the possible eventualities.

4. Map Out Mutual Expectations

What expectations do you have for the business partnership? Are these the same as the expectations of your prospective business partners?

It is best to have your expectations written down before you meet with potential partners. This will serve as a road map for the partnership, and will provide several advantages:

  • It will act as a partnership draft which will also be presented to the lawyers once the partnership kicks off.
  • Your expectations will give you a guideline within which you can experiment with the different potential partners before you make up your mind.
  • It will give you a clear vision of what you want from the partnership, which will help you to avoid getting sidelined even if you meet a potential partner with huge financial muscle.
  • A list of expectations should distinguish legal matters from partnership issues, and you can discuss the legal ones with a business lawyer.

5. Seek legal advice early

When starting a partnership, it is a good idea to seek legal advice right from the outset, and certainly prior to any negotiations between you and potential investors.

You need to let your lawyer know your expectations for the venture so that they can assess how realistic they are. They will also assist you in strategising the negotiations, and ensuring that you ask all the right questions. Your partner will also have a lawyer and it is best to be prepared because each of the attorneys will pursue the best interests of their client.

6. Don’t Overlook The Details

As an entrepreneur, you are likely to have an eye for the bigger picture; however, overlooking the details can have dire consequences.

There are several bases that you need to cover before you begin:

  • Establish your objectives and match them against those of your partners.
  • Determine the contribution to be made by each partner.
  • Assign the roles and duties of each partner; for instance, who will hire and train the employees and who will manage the enterprise?
  • Agree on a dispute resolution mechanism for the partnership such as arbitration or mediation.

By paying attention to the above key pointers, you can give your partnership the best chance of success.

Do you have an opinion? Are there other factors that you think are important when entering into a partnership? Respond in the forums, by email, on Facebook or via Twitter.

Archie Ward is a business consultant and social media strategist. Archie splits his time each year between Asia and Australia. While he is hard at work helping other people make their businesses successful, he hopes to launch his own by year end.

Porter’s Five Forces

Porter's Five Forces 2

(Source: Flickr)

The Porter’s Five Forces framework is used to determine the competitive intensity and attractiveness of an industry, and is relevant in the context of entering a new market, M&A, or starting a new business.

The intensity of competition will depend on the strength of the five competitive forces, however the significance of the forces will vary by industry.

1. Existing competition

How strong is the rivalry among existing firms?

Factors contributing to competitive rivalry include:

  • Increased number of firms;
  • Slower market growth;
  • Low product differentiation;
  • Low switching costs;
  • Industry wide excess capacity;
  • High fixed costs; and
  • High exit barriers.

2. Substitutes

What is the price performance of substitutes? Do customers have high switching costs?

3. Barriers to entry

What is the threat posed by new entrants?

Barriers to entry might include capital requirements, economies of scale, network effects, government policy, switching costs, access to suppliers, access to distribution channels, product differentiation, and proprietary product technology.

4. Supplier bargaining power

How much bargaining power do suppliers have?

5. Customer bargaining power

How much bargaining power do customers have?

[For more information on the consulting interview, download “The HUB’s Guide to the Consulting Interview“.]

Three C’s Framework

Three C's Framework

(Source: Flickr)

The Three C’s Framework may prove extremely valuable for consulting case questions.

It can help to assess the business situation in the context of entering a new market, M&A, product development, and starting a new business.

It involves examining customers, competition, and the company.

1. Customers

Eight (8) factors to consider when examining the customer.

1. Customer Identification

In general terms, who is the customer?

In trying to identify the customer, remember that the person who makes the purchase decision, the person who pays (the customer), and the end user may all be different people. For example, a doctor may prescribe medicine, paid for by an insurance company, and used by the patient.

2. Customer Segmentation

Customer segmentation can make it easier to understand customer needs and preferences, and the size and growth rate of different revenue streams.

It may make sense to segment customers by:

  1. Age group;
  2. Gender;
  3. Income level;
  4. Employment status;
  5. Distribution channel;
  6. Region;
  7. Product or product line;
  8. New versus existing customers; or
  9. Large versus small customers.

3. Size

How big is the market? How big is each customer segment?

4. Growth

How fast is the market growing? What is the growth rate of each customer segment?

5. Customer Preferences

What do customers want? Do different customer segments want different things? Are the needs and preferences of customers changing over time?

6. Willingness to Pay

How much is each customer segment willing to pay?

How price sensitive is each customer segment?

7. Bargaining Power

What is the concentration of customers in the market relative to the concentration of firms?

Do customers face high switching costs?

8. Distribution

What is the best way to reach customers (mail order, online store, factory outlet, retail store, supermarket, department stores, or network marketing)? Does each customer segment have a preferred distribution channel?

2. Competition

Competition can come from firms within an industry, or from firms in other industries who produce substitutes.

Competition can also come from suppliers and customers within the supply chain who exert bargaining power to extract a larger share of industry profits.

Eleven (11) factors to consider when examining the competition.

1. Competitor Identification

Who are the company’s major competitors? What products and services do they offer?

Who are the company’s indirect competitors? That is, which firms are producing substitutes?

2. Competitor Segmentation

Is it possible to segment the competition? This might be done by distribution channel, region, product line, or customer segment.

3. Size and Concentration

What are the revenues and market shares of major competitors? What is the concentration of competitors in the industry?

4. Performance

What is the historical performance of the competition? Relevant performance metrics might include profit margins, net income, and return on investment.

5. Industry Lifecycle

Where is the industry in its lifecycle? Early stage, growth, maturity or decline?

6. Industry Drivers

What drives the industry: brand, product quality, scale, or technology?

7. Competitive Advantage

What is the competition good at? How sustainable are these advantages?

What are their weaknesses? How easily can these weaknesses be exploited?

8. Competitive Strategy

What competitive strategy is the competition pursuing? Is the competition producing products that are low cost or differentiated? What customer segments is the competition targeting?

What is the competition’s pricing strategy, distribution strategy and growth strategy?

9. Barriers to Entry

The threat posed by potential competitors depends on the level of barriers to entry.

Barriers to entry make it more difficult for potential competitors to enter, and so reduces competitive rivalry and allows existing firms to maintain higher prices than would otherwise be possible.

Key barriers to entry might include capital requirements, economies of scale, network effects, government policy, switching costs, access to suppliers, access to distribution channels, product differentiation, and proprietary product technology.

10. Supplier bargaining power

Factors that affect the bargaining power of suppliers might include:

  1. The number of available suppliers and the strength of competition between them;
  2. Whether suppliers produce homogenous or differentiated products;
  3. The brand recognition of a supplier and its products;
  4. The importance of sales volume to the supplier;
  5. The cost to the firm of switching suppliers;
  6. The availability of supplier substitutes; and
  7. The threat of forward integration by the supplier relative to the threat of backward integration by firms in the industry.

11. Customer bargaining power

Factors that affect the bargaining power of customers might include:

  1. The number of customers;
  2. The volume a customer demands relative to a firm’s total output;
  3. The availability of substitutes;
  4. Customer switching costs;
  5. Access to product comparison information; and
  6. The threat of backward integration by the customer relative to the threat of forwards integration by firms in the industry.

3. Company

Ten (10) factors to consider when examining the company.

1. Performance

What is the historical performance of the company? What is its market share?

2. Competitive Advantage

What are the company’s resources and capabilities? How sustainable are the company’s advantages? What are the company’s weaknesses and can they be remedied?

3. Competitive Strategy

What is the company’s competitive strategy? Does the company focus on producing products that are low cost or differentiated? Which customer segments does the company target?

4. Products

What does the company offer and how does it benefit customers? Does the product have any downsides or side effects?

Is the product a commodity or differentiated?

How does the company’s product offering compare with the competition? Are there substitutes available?

Where does the product fall within its product lifecycle?

What is bundled with the product? For example, customer service, warranties, or spare parts. Are there opportunities to bundle or unbundle the product in order to increase sales volume?

5. Finances

If the company is considering a certain course of action, does it have sufficient funds available to undertake the project? What’s the break even analysis?

6. Cost Structure

Consider the cost structure of the business. This can be done by segmenting costs into value chain activities: inbound logistics, operations, outbound logistics, sales & marketing, customer service.

Value Chain

Consider also fixed costs and variable costs. Have there been any significant changes in the company’s cost drivers? How do costs compare to the competition?

7. Organisational Cohesiveness

Understanding a company’s inner workings can be important since competitive strategies can fail if they conflict with a firm’s general way of doing business. Analysing the inner workings of an organisation can be done by using the McKinsey 7 S Model.

8. Marketing

What does the company stand for? How do customers perceive the company and its products? How does the company communicate with customers?

9. Distribution Channels

What distribution channels does the company use to reach customers (mail order, online store, factory outlet, retail store, supermarket, department stores, or network marketing)?

10. Customer Service

How does the company interact with and support customers? Does the company have a customer loyalty program?

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]

Profitability Framework

The profitability framework is probably the most important framework for solving consulting case questions

Profitability Framework

Profit equals revenue minus cost.

1. Revenue

Revenue is normally thought of as being a function of price per unit and units sold.

Declining revenue can derive from a fall in prices or a reduction in units sold, and can be examined in four steps.

Step 1: Segmentation

What are the major revenue streams? It will typically be a good idea to segment units sold, and this might be done by:

  1. Product;
  2. Product line;
  3. Distribution channel;
  4. Region;
  5. Customer type (new/old, big/small); or
  6. Industry vertical.

Step 2: Examination

What percentage of total revenue does each revenue stream represent? Compare current and historical figures to identify how these percentages have changed over time.

Step 3: Diagnosis

What is the underlying cause of the problem?

Step 4: Response

Develop a strategic response.

1.1 Diagnosis

If faced with declining prices or volume, factors to consider include the following.

1. Macro Economy

  • PEST Analysis: Political upheaval; Economic decline; Socio-cultural factors; Technology. Have there been any recent or impending changes?

2. Customers

  • Market growth: Has market growth slowed forcing competitors to compete over market share?
  • Customer needs and preferences: Have customer needs and preferences changed?
  • Distribution Channels: What channels are used to reach customers? Has there been a change in the cost effectiveness of these channels?
  • Price Discrimination: Can the company distinguish between customers and charge different prices to different customer segments?

3. Competition

  • Rivalry: Have competitors lowered their prices? How does the company’s product mix, product quality, and cost structure compare to the competition?
  • Substitutes: Has the price performance of substitutes improved?
  • Barriers to entry: Has it become easier for new competitors to enter the industry?
  • Buyer bargaining power: Has there been an increase in customer bargaining power?

4. Company

  • Market Power: Does the company have market power (product differentiation, proprietary technology, economies of scale, network effects)?
  • Products: What products and product mix does the company offer? How do these compare to the competition? Is there something different about the products that might allow the company to raise prices?
  • Value chain analysis: Consider value chain activities: access to raw materials; operating capacity; inventory handling and distribution.

1.2 Response

Declining prices

In response to declining prices, there are three pricing strategies to consider.

  1. Competitive pricing: How do prices compare with the competition? Is the pricing appropriate given the product’s quality and relative position within the market? How is the competition likely to respond to the firm’s pricing strategy?
  2. Cost based pricing: What is the company’s cost structure? What percentage of costs are fixed and variable? A company that has high fixed cost and low variable costs will benefit from economies of scale and so may want to lower prices to increase market share.
  3. Value based pricing: Is the product a commodity or differentiated? Do different customer segments have a different willingness to pay? Are customers price sensitive (see “Price elasticity of demand”)? If prices are changed, how will this affect sales volume and product perception?

Declining sales volume

Faced with falling sales volume, there are four growth strategies that a business might choose to employ: market penetration, market development, product development, and diversification.

Product Market Expansion Matrix

  1. Market penetration: A strategy to increase sales to existing customers and increase market share. Market penetration can be pursued through a combination of initiatives relating to pricing, product, placement and promotion (see “Four P’s Analysis”).
  2. Market development: A strategy to sell existing products to new markets which might include new regions, customer segments, or distribution channels.
  3. Product development: A strategy to sell new products to existing customers to increase share-of-wallet.
  4. Diversification: A strategy to develop new products for new markets. This is the highest risk option. Look for markets with strong market growth and high levels of industry attractiveness (see “Porter’s Five Forces”).

2. Costs

The third driver of declining profitability (after prices and volume) is rising costs.

2.1 Diagnosis

Examine the cost structure of the business to locate the source of rising costs. This might be done by segmenting costs into value chain activities: inbound logistics, operations, outbound logistics, sales & marketing, customer service.

Consider also fixed costs and variable costs. Have there been any significant changes in the company’s cost drivers? How do costs compare to the competition?

2.2 Response

In responding to rising costs, there are three questions that a firm should consider:

  1. How long will it take to reduce major cost drivers?
  2. Are the activities strategically important?
  3. To what extent do the activities contribute to operational performance?

Outsourcing Matrix

A company will want to eliminate or outsource costly activities that have low strategic importance. If the activity has a low contribution to operational performance it should be eliminated, and if it has a high contribution to operational performance it should be outsourced.

A company will want to retain control of activities that have high strategic importance. This can be done by forming a strategic alliance or increasing efficiency.

If a company wants to increase efficiency, then it will need to find ways to reduce costs.

Common cost reduction techniques include:

1. Procurement

  • Consolidate procurement or renegotiate supply contracts.

2. HR Management

  • Reduce labour costs through decreasing salaries, training, overtime, benefits and healthcare, introducing employee stock ownership, and right sizing.

3. Technology Development

  • Use IT and digital technology to reduce communication and organisational costs.
  • Employ more advanced production technology.

4. Logistics

  • Partner with distribution companies (e.g. FedEx).

5. Operations

  • Outsource manufacturing to a lower cost jurisdiction (e.g. China/India/other).
  • Improve the utilisation rate of plant, property and equipment.
  • Relocate headquarters to lower cost city, region or country.

6. Finance

  • Reduce working capital including inventory and accounts receivable.
  • Refinance outstanding debt.
  • Divest non-core assets.

[For more information on the consulting interview, download “The HUB’s Guide to the Consulting Interview“.]

Overseas Business Expansion: The Promise and the Pitfalls

Overseas Business Expansion

This is a guest post from Archie Ward.

For most business owners, the dream is to one day expand beyond the original market. Whether a large corporation or an SME, many look for ways to scale and develop additional revenue streams. One of the most popular options is to expand overseas, where they can tap into additional groups of consumers that want their product or service. However, while expanding overseas may not sound any more complicated than adding additional cities to your network, there are many cultural, political and economic factors to consider when expanding internationally.

Before attempting to begin an overseas expansion, it might be wise to outline clear and realistic expectations about the new markets in question. Sometimes even the best-laid plans can go awry because of some oversight or cultural ignorance.

Timelines have proved to get drawn out, which can lead to delays like those experienced by Xiamoi Corp in starting operations in a foreign nation.

Another area that should not be overlooked is the money needed for the expansion. Because overseas expansion involves dealing in foreign currencies, it’s always smart to collect as much payment as possible in advance to avoid any potential pitfalls regarding currency values or other misunderstandings. A mismatching between currencies can turn transactions unprofitable overnight, or even land you in the red.

Language barriers often present problems with an overseas business. Many companies in the past, those entering Brazil and China in particular, have had issues regarding how a popular product’s name translated in the native language, resulting in marketing plans having to be drastically altered or scrapped altogether. Before doing a business expansion overseas, make sure the country’s humor and use of slang language meets your own, and be prepared to adjust accordingly if necessary. A top priority should involve hiring someone who works as a translator, who is also versed in common sense of both countries involved, as well as a good ear for marketing.

Perhaps more so than any other aspect of how to expand business overseas, legal barriers must be taken care of well in advance. Obtaining a business visa as early as possible will get things off to a good start, and researching tax laws, import restrictions, liability laws and customs law will help to avoid any embarrassing or costly issues from arising. If the expansion will involve hiring employees within the new nation, a thorough knowledge of the country’s labor laws will be needed to make sure all policies are followed.

While expansion may seem like a natural fit with some countries, others may present a challenge when it comes to gaining access to raw materials or skilled labor. If these areas present any problems, expansion may need to take place elsewhere. In some cases, too many changes to a product will be needed in order to overcome these challenges, resulting in too great a sacrifice of the business format.

Whenever a move is made into a new country, questions may arise surrounding intellectual property laws and quality control issues. When operating abroad, being able to protect a trademark or trade name is vital to a company’s success. This can greatly affect the ability of a company to grow, so strategies should be in place to not only protect intellectual property rights, but also to go after those who violate those rights.

When deciding on market penetration, one area that is at the forefront of those discussions is government regulations. A process that is difficult enough at the best of times, and in many overseas situations it can become a nightmare if not properly researched in advance. While many foreign governments are quite receptive to expansion from western companies, others may object to the idea based on past experiences or disagreements regarding political philosophy. This is where having the services of a local liaison can make all the difference. A liaison, in addition to understanding cultural differences and local laws, can also explain differences in protocol, etiquette, and customs to a company seeking expansion, allowing it to have a better understanding of the proper approach to take with government officials.

Finally, the success or failure of most products or services in foreign nations will usually be determined by the marketing strategy. A great example of this is fast food chains, which while serving food that has proven to be popular with foreign customers, have found themselves needing to de-emphasise their focus on speed in some countries due to a cultural emphasis on leisure and being able to relax during a meal rather than eating on the go. In fact, consuming fast food may be seen as a status symbol of wealth in certain developing markets, and so the whole idea of getting in quickly and leaving with a bundle of cheap calories may need to go out the window. McDonald’s, in particular, has shown to be an innovator in the fast food stakes abroad, with food offerings which respect local dietary laws, varying tastes and seasonal changes. Another example is coupon advertising, which while widely accepted in the West, is viewed as offensive in some nations that have fixed pricing. For success to occur, a marketing strategy needs to be put to the test to ensure plans contain elements of flexibility so that any changes which need to be made, can be made, and at short notice to boot.

While expanding a business overseas might entail extremely precise planning and will almost certainly involve many unexpected surprises along the way, those companies that take the time to plan the smallest of details will often find that the process results in growth which would have been unimaginable by simply trying to penetrate further into current markets.

Archie Ward is a business consultant and social media strategist. Archie splits his time each year between Asia and Australia. While he is hard at work helping other people make their businesses successful, he hopes to launch his own by year end.

Case Math

Case Math

(Source: Flickr)

In this post we outline some mathematical concepts that may prove useful for solving consulting case questions.

1. Break Even Analysis:

Relevant when trying to decide whether to launch a new product or invest in a project with high fixed costs.

Break Even Analysis

2. Customer Lifetime Value:

Customer lifetime value is a prediction of the entire future value that a company expects to derive from its relationship with a customer. It is a useful tool for a company that is trying to decide which customer segments to target and how much to spend on customer acquisition.

Customer Lifetime Value

3. Net Present Value:

The NPV of an investment is the present value of the series of expected future cash flows generated by the investment minus the cost of the initial investment.

Net Present Value

Where r = discount rate; CFt = expected cash flow in year t; CFn = expected cash flow in final year; g = long term cash flow growth rate.

4. Perpetuity:

A perpetuity is a constant stream of identical cash flows with no end.

Perpetuity

5. Price elasticity of demand:

Price elasticity of demand is a measure of the responsiveness of quantity demanded to a change in price, and is relevant when formulating pricing strategy.

Price elasticity of demand

If demand is elastic (Ed > 1) then changes in price will have a relatively large effect on the quantity demanded, and total revenue will rise if prices are lowered.

If demand is inelastic (Ed < 1) then changes in price will have a relatively small effect on the quantity demanded, and total revenue will rise if prices are raised.

6. Product life cycle:

The product life cycle is relevant when calculating the expected lifetime revenue of a product.

Product Life Cycle Product Revenue 2

7. Profit Margin:

Gross Profit Margin: Gross profit margin measures how much of every dollar of sales revenue remains after subtracting the cost of goods sold.

Gross Profit Margin

Net Profit Margin: Net profit margin measures how much out of every dollar of sales revenue a company actually keeps. Net profit margin is useful when comparing companies in similar industries. A higher net profit margin indicates a more profitable company that has better control over its costs compared to its competitors.

Net Profit Margin

Contribution Margin: A cost accounting concept that allows a company to determine the profitability of individual products.

Contribution Margin

8. Return on Investment:

ROI is a performance measure that a company can use to evaluate the efficiency of an investment or to compare a number of different investments.

Return on Investment

9. Rule of 70:

The Rule of 70 is a simple rule of thumb that can be used to figure out roughly how long it will take for an investment to double, given an expected growth rate.

The rule can be described by the following equation:

Rule of 70

 

[For more information on the consulting interview, download “The HUB’s Guide to the Consulting Interview“.]

Sample Consulting Case Questions

Sample Consulting Case Questions

(Source: Flickr)

Below we provide a selection of sample consulting case questions.

The questions are broken down into seven (7) question types to make them easier to digest.

1. Declining Profitability

  1. Our client is eBay. Its share price fell from $310 to $200 per share on reports of declining profits. What’s going on and how can we turn this around?
  2. A large American beverage company acquired a fruit juice company for $350 million five years ago with the goal to increase revenues tenfold. Revenues have instead fallen 50% to $20 million. What’s going on and how can we turn this around?
  3. Our client is a mid-sized retail bank in Kazakhstan. The bank has achieved sustained revenue growth over the last two years but its profits have consistently declined. What is causing the decline in profits? What can we do about it?

2. Entering a New Market

  1. Your client is a low-cost airline headquartered in Philadelphia with frequent service to cities along the East Coast of the United States. The CEO is interested in expanding service into a small town in the Midwest; let’s call it Greenville. What is your recommendation?
  2. A large Korean electronics company is thinking about entering the market for tablet computers. Is this a good idea?
  3. A South Korean company is acquiring a U.S. smart phone maker. What factors do they need to take into account?

3. Pricing Strategy

  1. The CEO of a large Asian electronics firm has come out with a new smart phone, which is much like the iPhone. How should it price this product?
  2. Dr Pepper is trying to boost profitability by raising prices. It’s focusing on supermarkets. How is raising prices likely to affect profitability? Should it go ahead with the plan?
  3. Toyota has invented a car with incredible durability, it can be driven a thousand times further than cars currently on the market before needing to be serviced. The CEO asks you, “How should Toyota price this car?”

4. Growth Strategy

  1. Our client is the Museum of Fine Arts in Boston. They want to develop a growth strategy for the next five years. What would you advise them to look at, and what are your recommendations for growth?
  2. You have been brought in as the CEO of Blackberry. The company started making handheld wireless devices in 1999 and gained substantial market share in the initial smart phone market prior to the release of the iPhone in 2007. The company missed the trend towards touchscreen smart phones and has fallen into serious financial difficulty. How can we regain market share, and return Blackberry to its former glory?
  3. Emirates Airline is considering signing an agreement with Ben and Jerries Ice-cream, which would allow them to serve several flavours of ice cream on Emirates flights. Is it a good idea for Emirates to sign this agreement?
  4. Virgin Galactic has developed a new rocket that can take off and land like a normal plane. Virgin Galactic wants to give customers the opportunity to see the earth from space and experience low gravity on a five hour flight. The prototype rocket will cost $1 billion to produce. Each additional rocket will cost $100 million.
    • Estimate the size of the global market
    • What price should Virgin Galactic charge for a ticket?
    • How many rockets should it produce?
    • Should it sell rockets to competitors?
  5. P&G has just discovered a new lightweight metallic compound that could be used to produce metal containers like soft drink cans. What should they do with it?

5. Operations

  1. Coca Cola has a bottling plant in Mumbai. Over the past three months, inventory has tripled and customer complaints have doubled. What should the company do?
  2. Cabana Surfboards manufactures surfboards at a factory in California. It is currently summer, and Cabana is having trouble meeting demand. Cabana’s surfboards are distributed through surf shops located near popular tourist beaches and, in recent years, Cabana has developed a strong reputation among first time surfers. What should the company do to keep up with demand?
  3. A leading financial services company is trying to reduce operating expenditures. How can it achieve its savings target?

6. Competitive Response

  1. CanadaCo, the largest discount retailer in Canada, currently holds the dominant market share in the industry. USCo, the largest discount retailer in the United States, has decided to expand into Canada by purchasing CanadaCo’s competition. How should the CEO of CanadaCo respond?
  2. Our client, let’s call them AcmeCo, is a specialty shoe manufacturer with retail stores in New York, San Francisco and London. AcmeCo has discovered that Nike is planning to enter its segment of the market. What should it do?
  3. Our client is Kellogg’s, a leading international manufacturer of branded cereals. Over the past five years, supermarkets and distributors in America have started selling private label goods including private label cereals. Private label goods are produced by manufacturers and sold by retailers and supermarkets directly to the end user. The private label trend has started to impact Kellogg’s market share. How should Kellogg’s respond to this competitive threat?

7. Turnarounds

  1. Radioshack, an American consumer electronics giant of yesteryear, faced chaotic trading on Wednesday as analysts predicted the company would report its 10th straight quarter of losses. Assuming RadioShack averts bankruptcy and achieves a successful refinancing, what should the strategy be to turnaround and save this iconic company?

[For more information on consulting interviews, please download “The HUB’s Guide to Consulting Interviews“.]