Industry Research AssignmentConsulting Firms

Group 4: Kenny Chik, William Fung, Lok Wong, Wai Poon, Boscal Yuen

Content

What Consulting Firms do

Big players

Mckinsey & CompanyCorporate Finance

Insurance

Banking & Securities

What Consulting Firm do

as their name suggests - they consult

e.g.

"technical consultants" give advice on technological issues "financial consultants" give advice about money

Our focus: Management Consulting

Inside a consulting firm are many expertsthey are typically organized into teams, specifically chosen for a given project.the team is constructed internally by the consulting firm, and it is maximized for efficient human capital composition

e.g. “How to make vanilla coca-cola a success”team size depends on the job specifications and the clients' needs

Big NamesMcKinsey & Company

Boston Consulting Group

Booz Allen Hamilton

Bain & Company

2003 FIRM 2002 RANK HEADQUARTERS

RANK

1 McKinsey & Company 1 New York, NY

2

Boston ConsultingGroup 2 Boston, MA

3 Bain & Company 3 Boston, MA

4 Booz Allen Hamilton 4 McLean, VA

5 Monitor Group 8 Cambridge, MA

6

Mercer ManagementConsulting 6 New York, NY

7 IBM Global Services 13 Somers, NY

8 Deloitte Consulting 10 New York, NY

9 Accenture 5 New York, NY

10 Gartner 9 Stamford, CT

The Boston Consulting Group

An international strategy and general management consulting firm 

Mission is to help leading corporations create and sustain competitive advantage.

The Boston Consulting Group

Areas of Expertise :

The firm conducts research and analysis in several key areas of expertise:

branding, consumer goods and retailing, corporate development, deconstruction, electronic commerce, energy and utilities, financial services, health care and pricing etc…

The Boston Consulting Group

Main Clients :the 500 largest corporations in North America, Asia, Europe, and Australia.

America : Washington DC, LA, San Francisco, NY, Chicago, BostonAsia : Tokyo, Vietnam, HK, Singapore,Bangkok, Shanghai etc…Europe : London, Paris, Hamburg etc…

Booz Allen Hamilton

Booz Allen, a global leader in strategy and technology consulting, provides services to major international corporations and government clients around the world.

Booz Allen Hamilton

Areas of Expertise:

Strategy

Organization and Change Leadership

Operations

Information Technology

Technology Management

Booz Allen Hamilton

Main Clients:

(1) New Jersey Transit

(2) Hudson-Bergen Light Railway

(3) Federal "Aviation Agency

(4) Nissan Motor Company

(5) Brasil Telecom

Bain & Company

Areas of Expertise:

Portfolio management, bill presentment, M&A, private equity consulting

Bain & Company

Main clients:

Bain has done over 1,000 studies for more than 300 financial services firms around the world - one-third of them banks.

Early stage venture capital, large traditional buyout firms,retail, commercial and investment banks

McKinsey & Company

Founded in 1926 by the University of Chicago accounting professor James "Mac" McKinsey.

In 1964, the McKinsey Quarterly was launched. The foremost journal of management ideas produced by a consulting firm.

1994-97, it accelerates global expansion. Offices in more than 40 countries.

Mckinsey & Company

In 2000, the high-tech boom helps to drive annual revenues over $3 billion, making McKinsey twice as big as its nearest competitor.

Most recently, McKinsey assists Hewlett-Packard CEO on HP's controversial Compaq acquisition. McKinsey earns $9 million on deal.

Service offerings

Banking & Securities

Helps clients in commercial banking and investment banking/brokerage, asset managers, diversified financial institutions, consumer finance companies…

Business Building

Focuses on kick-starting and sustaining profitable growth in client organizations.

Service offeringsElectric Power & Natural Gas

Helps incumbents and new entrants manage in this rapidly expanding and liberalized sector.

Travel & LogisticsAddresses all transportation sectors, including airlines and airports, railroads, post, parcels, express delivery, trucking, forwarding and logistics, shipping and ports, urban transport, and travel and tour operations.

Corporate Finance and Strategy

Capital Markets StrategyAdvise how to create and unlock value in capital markets.

Example:  Improving the low market valuation of a companyThere were three main ways:

Better information for investors and equity analystsCompany can raise more capital to finance further growth and increase its strategic flexibilityLimitation of the risk of an unfriendly takeover, with the danger of the company losing control over its future

Corporate Finance and Strategy

Mergers, AcquisitionsSelect and value targets, determine the value-creation potential of the transaction, and provide execution support from early discussions to negotiations and closing

Post-Merger ManagementProvide problem-solving and execution support for high-impact, tailored solutions focused on capturing situation-specific sources of value and building internal capabilities to make repeated acquisitions.

Corporate Finance and StrategyExample: A European Bank want a further expansion, but found the situation was complex in terms of the “emerging markets” economic environment.

Mckinsey help client to do the following things:To assess the attractiveness of the target’s country banking market and of the target itselfTo develop a valuation and a price range for the bidding process, including the development of a post-acquisition strategy.To embed the acquisition opportunity within the client’s growth strategy.

Corporate Finance and StrategyExample: Clients identified an opportunity to acquire a British manufacturing company in a relatively mature industry, and to merge this with a foreign company in the same industry.

Mckinsey help client to evaluate the following three factors :

How attractive is the industry?What is the position and potential of the British company, and of the foreign player? What scale of synergy could be achieved by the merger?

Corporate Finance and Strategy

Value-Based ManagementHelp establish value-based performance enhancement programs throughout the organization.

Example: Portfolio of client businesses was too broad, and found difficult to perform much better

Mckinsey will help client to develop a new corporate strategy that would further focus the business portfolio, and implement a program that would, in three to five years, fundamentally transform the corporation

Corporate Finance and StrategyExample: (cont’)Finally Mckinsey did the following things:

Objective Assessment of Competencies (chose the business units with the most shareholder value at stake and worked with them for 2-3 months)Evaluation of the Company's PortfolioDeveloping a Transformation Plan

Initial Public OfferingsAdvise on value-creating initial public offerings, provide services for the full range of IPOs, from start-ups through privatizations and spin-offs.

InsuranceProperty and Casualty Insurance

work with both personal and commercial lines carriers

to identify and develop new business opportunities

to improve operational performance in an increasingly global arena

InsuranceLife Insurance & Wealth Accumulation

help clients shape distinctive strategies

develop the executional excellence necessary for continued success

InsuranceAsset Management

embrace all elements of the business system, including fund administration, the investment management process, distribution, product development, and branding/marketing.

InsuranceReinsurance

offer guidance and expertise to reinsurers

on global business strategy and investment management

on opportunities in life and health reinsurance

InsuranceIT in Insurance

work with clients focuses on six key drivers: business requirements, technology architecture, application portfolio, organizational capability, technology infrastructure, and economic priorities.

InsurancemRisk: Insurance e-Commerce

launch on-line businesses both within financial services and across other industriesoffers senior insurance executives insurance news and proprietary insight on industry trends

Banking and Securities European Banking & Insurance

Insurance asset management: Property and casualty, life, health, reinsurance and

asset management

Retail banking: Financial (and nonfinancial) institutions

participating in the personal financial services arena

Banking and Securities

Wholesale banking: Risk management, marketing

Banking & Securities

North American Banking & Securities

Payments: credit/debit cards, internet payment systems,

payment networks and devices

Retail Banking/Consumer Credit: cost and productivity management, sales and

marketing effectiveness