strategic planning and organizational design for management consulting firm in vietnam

Strategic Planning And Organizational Design For

Management Consulting Firm In Vietnam

Nguyen Anh Tuan (EHM029431)

Dr. Fredric William Swierczek (Chairman)Dr. Shingha ChiamsiriDr. Willi Zimmermann

Student:

Committee:

Problems

Supply-side problems• Firms are new and small in sizes

• Few thoughtful services provided, majority of business supporting services

• Lack strategic direction, consulting skills, experience and specialization, poor marketing

Demand-side problems• Low usage or demand

• Low awareness and understanding of consulting service value

Regulation problems• Information control

• Complicated procedures in hiring foreign consultants

• Forbid individual consultants

• Unclear regulation for consulting market

Objectives

Overall objective To improve performance of local consulting firms

Specific objectives To review literature on international practice in managing consulting firm

To review literature on strategic planning and organizational designs applicable to consulting firm

To review international management consulting market

To review Vietnam consulting market

To develop a framework for strategic planning and organizational design for consulting firms in Vietnam

Method Secondary and primary researches (much on qualitative)

Vietnam Consulting Market

Firm’s profile– Over 100 firms including FDI, SOE, SME: Small in size, majority below 15

staff

– Individual consultants from universities, research institutions, government agencies, etc.

Service lines– Strategic management and functional strategy consulting services (low

usage; often bought by FDI, donors, large SOE)

– Business support services (higher usage)

Challenges– Demand-side, supply-side and regulation challenges (presented as problems

above)

Relative SWOTStrengths

Weaknesses

Opportunities

Threats

• Low price

• Strong local relationships

• Individuals’ capabilities

• Understanding local environment

• Quick imitation of new knowledge & services

• Poor service quality

• Low value services

• No strategic direction

• Lack of skills and knowledge

• Lack of specialization

• Lack of experience

• Poor marketing

• Lack of official network

• Relying on connections

• New, embryonic market

• Little competition

• Easy market entry

• New and underdeveloped market

• Low client demand

• Easy market entry

• Competition from foreign consultants

• Substitute products

• Strict control of information

• Complicated in hiring foreign consultants

• Forbid individual consultants

• Lack of professional standards

• Unclear regulation/ support from government

Forces Driving Competition

Other Stakeholders

Potential Entrants

Relative power of unions,

governments, etc.

Threat of new entrants

Bargaining power of suppliers

INDUSTRY COMPETITORS

Bargaining power of buyers

Suppliers Buyers

Rivalry Among Existing Firms

Threat of substitute products or services

Substitutes

Micheal Porter

HighHigh

High

MediumMedium

Leverage Structure

David H. Maister

Fee

Costs

Senior

Manager

Staff

Brain

Grey Hair

Procedure

Profitability

(Success)

Market for Staff (Satisfaction)

Client Marketplace

(Service)

Professional Service Firm’s

Leverage Structure

Mission, Objectives

Mission: “Our mission: KPMG is the global network of professional services

firms whose aim is to turn knowledge into value for the benefit of its clients, its people and its communities.” (KPMG)

“Our mission: To help our clients make distinctive, lasting, and substantial improvements in their performance and to build a great firm that attracts, develops, excites, and retains exceptional people.” (McKinsey&Company)

Objectives: Should be targeted to the three goals of a consulting firm: (i) client

services, (ii) staff satisfaction, and (iii) profitability.

Corporate Strategy

Strategic management consulting

Business support services

Functional management consulting

Numbers of

suppliers

Large

Small

Low High Transaction volumn

• Diversification

• Vertical integration

• Single business

Consulting firms

Single business

Mix of service lines and industries

Strategic alliance, networking

Leverage or select specific service group to focus (portfolio)

Business Strategy

Cost leadership strategy Low price, low level of differentiation, easy to imitate by competitors, ignore

clients’ taste.

Majority of local firms in Vietnam follows this strategy by providing supporting consulting services.

Differentiation strategy Unique service satisfying clients’ need (foreign clients, donor projects) which

could not be easily offered by competitors.

Be able to charge premium price considerably above industry’s average.

Little firms in Vietnam follow this strategy, except some foreign firms.

Focus strategy Serve a limited client group or segment by geography, by type of clients, or by

service lines or industries.

Focus on differentiation or cost-leadership after choosing market segment.

Functional Strategy

COMPETITIVE ADVANTAGE

3 GOALS OF A CONSULTING FIRM

Client focusSatisfying client needs

Staff SatisfactionProfitabilityClient Service

Efficiency

Quality

Innovation

Client Responsiveness

Service development innovationPractice management innovationMethodology and tools innovationEngagement or project innovation

Quality of staffClient service quality

Service quality management

IT efficiencyHR efficiency

R&D efficiencyMarketing efficiency

Fee & Costs efficiency

Organizational Structure

Financial Services SectorPartnerManagerStaff

Healthcare SectorPartnerManagerStaff

Public SectorPartnerManagerStaff

StrategyPartnerManagerStaff

HR CapitalPartnerManagerStaff

IT ServicesPartnerManagerStaff

Managing PartnerTechnical

Committees

Supporting Functions (HR, Accounting, Marketing, etc.)

Engagements Projects









Other Strategic Issues

Global strategy, strategy in embryonic market

Operations in other underdeveloped countries (Laos, Cambodia).

Pioneers and innovators could earn high profits in embryonic market.

Policies, procedures, guidelines

Practice management manuals/ Client service policies and procedures/ Quality management policies/ HRM (Recruiting, retaining, promotion, compensation, training, etc.) policies and procedures, etc.

Evaluation and control systems

To measure efficiency, quality, innovation and client responsiveness.

Consulting firms should develop measures with focus on three goals under concrete procedures.

Strategy In Action (1/2)

o Image and reputation building

Through engagements with efficiency, quality, innovation and client responsiveness

o Effective marketing and sales

Market intelligence

Client planning and segmentation

Selected initiatives (seminar, speech, writing, etc.) to generate leads or interests

Push or direct marketing tactics through engagement teams, relationships, partnerships, etc.

Business development with accountabilities, responsibilities and rewards

Strategy In Action (2/2)

o Leverage

Right people

Right work

Right incentives and fee

o Capability

Build up core competencies

Thank You For Your Attention!

strategic planning and organizational design for management consulting firm in vietnam

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