Ok, so you’ve spent hours networking with your target consulting firms, training for the case, and prepping your behavioral interview answers. Now what?
Before your interviews, do your homework on the consulting industry as a whole. First, learn the history. For strategy consulting, you can learn the genesis of pioneering firms like McKinsey, Bain, and BCG by reading Walter Kiechel’s “The Lords of Strategy”.
Second, learn the current state of consulting. To get you started, we’ve outlined 3 key consulting trends you should be aware of:
1) Return of the Big 4: During the 1980’s and 90’s, the Big Four (KPMG, PwC, EY, Deloitte) developed consulting arms to complement their tax and financial advisory practices. In the early 2000’s, Sarbanes-Oxley led KPMG, PwC, and EY to divest their consulting branches (which became or were acquired by IBM, BearingPoint, Capgemini, and Accenture, respectively). Deloitte retained its consulting practice as a separate entity from its accounting services, eventually diversifying into three branches: Human Capital, Technology, and Strategy & Operations.
Post-recession and with an eye towards high-margin growth, all four firms have invested heavily in re-building a global presence in management consulting, as evidenced by:
- Deloitte’s acquisition of Monitor Group (re-branded as Monitor Deloitte) in 2013
- PwC’s acquisition of Booz & Company (re-branded as Strategy&) in 2014
- EY’s acquisition of Parthenon in 2014
- KPMG’s acquisition of Towers Watson’s HR Service Practice and strategy firm High-Point Rendel in 2015
The below chart maps the industry’s current landscape as best as possible, given the dearth of financial information on consulting firms.
This next chart highlights the premium that various firms command in the marketplace.
2) MBB Strikes Back: Facing not only to the re-entry of the Big Four, but also to the advent of digital-age consultancies and design thinking experts, McKinsey, Bain, and BCG have responded via new partnerships and acquisitions to supplement their strategy consulting capabilities.
- Traditional Business: The simplest unions are those that align with the firms’ current business services, expanding horizontally in the strategy space to add global scale.
- Current Business: At the same time, vertical deals have allowed the strategy firms to up-sell implementation services to their clients, thereby creating more consistent revenue streams.
- Future Business: Finally, to remain at the bleeding-edge of the consulting space, firms now provide thought leadership on big data analysis / visualizations, human-centered design, and marketing in an increasingly decentralized world.
Graphic Credit: Beaton Capital
3) The Last Frontier: Traditionally, consulting has been prevalent in developed economies, with only occasional site visits or pro-bono engagements in emerging markets. However, over the past 10-15 years, emerging markets have increasingly become home to Fortune Global 500 corporations. Consulting firms have invested accordingly, building offices in more diverse geographies to create stronger global brands.
- McKinsey in Manila
- Bain in Bengaluru
- BCG in Bogotá
- Deloitte in Dubai, and
- Strategy& in São Paulo
Graphic Credit: Fortune
As you consider your target firms, make sure that you understand the trends impacting the industry as a whole. Through this awareness, you’ll have more productive conversations with recruiters and make a more informed decision on which firms have a trajectory that matches your interests.
For similar insights, as well as in-depth case interview training, behavioral interview prep, and resume / cover letter review, sign-up with a Consulting Interview Coach today!