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What does "market success" mean in consulting?

 
#1 What does "market success" mean in consulting?
10/11/2006 12:34

Tinker

Hello, I would be grateful for help answering any of the following questions. One of my criteria when choosing where to work is the organsiation's market success. However, as I don't know the consulting market that well, I am trying to work out what constitutes "success" here. By market success, I mean I am looking particularly at financial/market share measures. I am not considering "prestige" directly here.

As well as understanding the measures, I am interested in the performance levels that actually benchmark success. For example, if I asked a recruiter whether the consulting division is profitable and they said they average a 5% profit margin, is this good or bad?

What does market success mean in consulting?

What are profit margins usually like in consulting businesses. Do most medium or large consultancies make a profit each year, or are they profitable only in six out of ten years for example?

Do partners worry if the business makes a loss one year, or do they look at it as a success if the firm makes a net profit over a ten year period for example?

Do consultancies that operate as part of larger organisations e.g. outsourcing providers have the same profit standards? Is it an issue if they never make a profit; are they judged instead on how much prestige they add to the organisation or how much they allow other services to be sold into the client?

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#2 RE: What does "market success" mean in consulting?
10/11/2006 13:47

Village Idiot to Tinker (#1)

The Village Idiot doesn't have a lot of time for people who ask questions without having done even a little bit of research. A Google search on "margins in consultancy" reveals quite a few insightful websites. The Village Idiot doesn't like your chances of having the luxury of choosing which consultancy you'd like to work for when :-

1. You don't understand the dynamics of the market in which you'd like to work; and,

2. You don't possess sufficient initiative to try to find the answer on your own.

But it's Friday and the Village Idiot is in a good mood. So he'll tell you for nothing that consulting is a high-margin business, although margins have eroded in the past few years -- both because some of their work is becoming commoditised (e.g. IT work) and because companies are utilising consultants differently now than they used to.

In fact, the VI will even point you towards some further reading:

Consultancy leaders battle to transform our maturing industry

http://www.consulting-times.com/July2005/5.aspx

MCG doubles profit for H1 (outlines sample margins at some firms)

http://www.top-consultant.com/UK/news/Article_Display.asp?ID=3001

Lots more reading available if you show some initiative and do a brief search.

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#3 RE: What does "market success" mean in consulting?
10/11/2006 14:37

Abacus to Village Idiot (#2)

Tinker - I work in IT strategy consulting with a Big 4 consultancy. Representative margins are 28% in a boom and 4% in a bust. Something wuold go pop if we made an overall loss.

Idiot - thanks for successfully demonstrating that you don't know the answer, let alone understand the question. "High" and "low" are relative terms. Once you leave school and get a real job you may be able to contribute something meaningful to the world and the adults' conversations.

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#4 RE: What does "market success" mean in consulting?
10/11/2006 14:39

anon to Village Idiot (#2)

Please stop refering to yourself in the third person. It is ridiculouly pretentious and I can only assume that you are a banker, or the rhyming slang equivalent.

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#5 RE: What does "market success" mean in consulting?
10/11/2006 15:09

Elf to anon (#4)

Julius Caesar (of Caesar dog food fame) referred to himself in the third person. I know it's true because I read it in an Asterix comic.

Perhaps Village Idiot is a Roman emperor, or the rhyming slang equivalent.

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#6 RE: What does "market success" mean in consulting?
10/11/2006 15:40

Village Idiot to Elf (#5)

The Village Idiot is impervious to criticism. The jealous may mock, the Village idiot meanwhile (protected by his shield of steel) endures.

All hail the Village Idiot. And repeat after me:

Guns don't kill people. Village Idiot kills People.

There is no theory of evolution. Just a list of animals Village Idiot allows to live.

Village Idiot does not sleep. He waits.

The chief export of Village Idiot is Pain.

There is no chin under Village Idiot's Beard. There is only another fist.

Village Idiot has two speeds. Walk, and Kill.

The leading causes of death in the UK are: 1. Heart Disease 2. Village Idiot 3. Cancer

Village Idiot drives an ice cream truck covered in human skulls.

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#7 RE: What does "market success" mean in consulting?
10/11/2006 15:51

Boxershorts to Village Idiot (#6)

Village Idiot clutters our forum with boll*cks.

***

As for my response to Tinker's question:

A lot of the "market success" criteria and commentary here is foucused on firms - and big ones at that. It leaves no room for consideration of success among the smaller firms, niche consultants or individual practitioners.

For my part, market success is not about market share. I reckon it's about three questions (which I mentioned to Beng recently in a delightful and charming debate).

1. Has the consultant made things better for the client?

2. Does the client trust the consultant's judgement and recommendation?

3. Would the client work with the consultant again?

These, in consulting terms, are the questions that determine consulting success. If the answer is yes, then surely the money and referrals will follow ...

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#8 RE: What does "market success" mean in consulting?
10/11/2006 16:08

anon to Boxershorts (#7)

village idiot, I'm thinking of a word that rhymes with James Blunt.

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#9 RE: What does "market success" mean in consulting?
10/11/2006 16:10

anon to anon (#8)

Seriously village idiot how old are you. I'm guessing that you're just a kid. Go post on studentsroom.com and come back when you've matured a bit.

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#10 RE: What does "market success" mean in consulting?
10/11/2006 18:32

curly to Village Idiot (#6)

I love how Village Idiot has just copied and pasted a list of Chuck Norris "facts" (www.chucknorrisfacts.com) and replaced Chuck Norris with his/her own name.

I'm not sure what's more pathetic - the polytechnic-standard plagiarism, or the fact that fake Chuck Norris facts stopped being cool and fun several months ago. Even collegehumor.com thinks they're passé (I think the term they actually used was "gay").

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#11 RE: What does "market success" mean in consulting?
11/11/2006 13:50

! to curly (#10)

Some severe humourless going on here, coupled with the astonishing inability to recognise a p1ss take.

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#12 RE: What does "market success" mean in consulting?
11/11/2006 14:01

tony to ! (#11)

Here's a rhetorical question: Why is it funny when one person takes the p!ss out of another, but humorless when the ridicule goes both ways? As the old bathhouse saying goes, "if you can't take it, don't shake it".

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#13 RE: What does "market success" mean in consulting?
11/11/2006 17:15

! to tony (#12)

Here's a rhetorical answer (!) - when it does not seem to have ocurred to people that Village "Chuck Norris" Idiot is probably not the poster as Village "Respect ma authority on all matters MC!" Idiot, because you can enter any name you like. see?

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