Post on 02-Jan-2016
description
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:
Slide 2
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
Slide 3
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)
Slide 4
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)
Slide 5
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
Slide 6
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
Slide 7
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
Slide 8
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.
Slide 9
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)
Slide 10
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.
Slide 11
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
Slide 12
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
Engagements Projects
Engagements Projects
Engagements Projects
Engagements Projects
Engagements Projects
Engagements Projects
Engagements Projects
Engagements Projects
Slide 13
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.
Slide 14
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
Slide 15
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!