COMPANY PROFILE The Boston Consulting Group

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1 A Progressive Digital Media business COMPANY PROFILE The Boston Consulting Group REFERENCE CODE: 063D98E2-563D-47F5-8C67-3F761ECE5B20 PUBLICATION DATE: 26 Aug COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED

2 TABLE OF CONTENTS TABLE OF CONTENTS Company Overview...3 Key Facts...3 SWOT Analysis...4 Page 2

3 Company Overview Key Facts Company Overview COMPANY OVERVIEW (BCG or "the company") is a global management consulting company and an advisor on business strategy. The company partners with clients from the private, public, and not-forprofit sectors in all regions to identify their opportunities, address their challenges, and transform their enterprises. BCG has its presence in North America, Africa, Asia Pacific, Central and South America, Europe and the Middle East. It is headquartered in Boston, Massachusetts and employs over 12,000 people. The company recorded revenues of $5,000 million in FY2015. KEY FACTS Head Office One Beacon Street Boston Massachusetts USA Phone Fax Web Address Revenue / turnover (USD Mn) 5,000.0 Financial Year End Employees 12,000 Ticker Page 3

4 SWOT Analysis SWOT Analysis SWOT ANALYSIS (BCG or "the company") is a global management consulting company and an advisor on business strategy. The company's strong acceptance as a strategy consulting brand differentiates it from many of its peers and equips BCG with competitive traction. However, intense competition in the marketplace may negatively impact BCG's growth in market share and margins. Strength Weakness Established brand image in the strategy consulting domain Broad portfolio of solutions for multiple industry sectors Diversified customer base Opportunity Lack of scale as compared to peers Threat Positive outlook for the management and marketing consulting market Growth in the non-it end markets drives demand for consulting services Intense competition Prolonged recovery of European economy could impact demand Emergence of in-house consulting units Strength Established brand image in the strategy consulting domain BCG, over the years has cultivated and built up a reputation for itself and a corporate brand which has become almost synonymous to strategy consulting. In the process, BCG has pioneered some path breaking ideas and concepts in the strategy consulting domain that provided innovative frameworks and solutions to address the needs and problems of business community. The company's focus on conceptual and strategic thinking has yielded many concepts that went on to become classics of strategy, and resulted into many academic constructs, tools and methodologies. It pioneered the growth share matrix/bcg Matrix model which was one of the famous concepts in resource allocation strategy and was the basis for origin of further models. The company also formulated many concepts, including the experience curve, time-based competition, sustainable growth, and total shareholder value, which many organizations have leveraged to improve their competitive positions. Most of BCG's models are regarded as benchmarks in strategic management and business consulting areas. The strong acceptance of BCG as a strategy consulting brand differentiates it from many of its peers and equips the company with competitive traction. Broad portfolio of solutions for multiple industry sectors Page 4

5 SWOT Analysis BCG has developed broad expertise in offering services for various industry verticals, including automotive; biopharmaceuticals; consumer products; education; energy and environment; engineered products and infrastructure; financial institutions; hardware and software; health care payers and providers; insurance; media and entertainment; medical devices and technology; metals and mining; private equity; process industries and building industries; public sector; retail; social impact; technology industries; telecommunications; and transportation, travel and tourism. Moreover, the company offers strategic business consulting services in several areas, including corporate development; corporate finance; digital economy; globalization; growth; innovation; management in a two-speed economy; marketing and sales; mergers and acquisitions, and divestitures; operations; people and organization; postmerger integration; risk management; strategy; sustainability; technology and digital; turnaround and transformation and large scale change. Furthermore, the company has established a wide geographic presence, with 85 offices in 48 countries. The company's expertise across multiple sectors and industries coupled with the robust geographic spread enables it to keep its business sustenance at high levels. Diversified customer base The company serves large organizations in both private and public sectors. A majority of the company's clients rank among the world's 500 largest corporations around the world. BCG also advises midsized businesses, nonprofit organizations, and government agencies. Some of the company's clients include World Food Programme, Telefonica UK, Fondazione Palazzo Strozzi, Allianz Germany, and Ullens Center for Contemporary Art, among others. Strong customer base not only ensures steady revenues for the company but also adds to its brand image in a highly competitive market and thereby enabling it to attract high value clients. Weakness Lack of scale as compared to peers The company lacks scale when compared to its peers in the consulting industry. Many of its competitors, such as Deloitte, Accenture and Ernst & Young, have substantially greater financial and other resources than the company. For instance, the company's competitor Deloitte reported revenues of $35.2 billion for the year ended May Also Accenture, another competitor of the company reported revenues of $32.9 billion during the financial year ended August Ernst & Young reported revenues of $28.7 billion during the financial year ended June In comparison, the company recorded revenues of $5,000 million in FY2015. Large scale enables these competitors to leverage on their facilities and resources to achieve operating efficiency. The company stands to lose out often in bidding for larger projects and assignments due to its lower scale which also impacts its operating efficiency significantly. Opportunity Positive outlook for the management and marketing consulting market The management and marketing consulting market witnessed a strong growth in the recent past and is Page 5

6 SWOT Analysis expected to grow in the near future. According to MarketLine, the global management and marketing consultancy market grew by 3.5% in 2015 to reach a value of $318.3 billion. Further, the performance of the market is forecast to remain strong, with an anticipated compound annual growth rate (CAGR) of 3.2% for the periods, which is expected to drive the market to a value of $372 billion by the end of BCG is one of the leading management and marketing consulting company. The company offers management consulting services and business advisory services across various industries. Its marketing and sales consulting services include brand strategy, marketing, sales and channels, pricing, go-tomarket strategy, and the consumer and customer insight. The positive outlook of the management and marketing consulting market offers ample growth opportunities to the company. Growth in the non-it end markets drives demand for consulting services Some of the non IT end markets of the company have been growing over the past few years. Moreover, markets including the healthcare, oil and gas and the pharmaceutical markets are forecast to show a steady growth in the medium term. According to MarketLine the global healthcare providers sector had total revenues of $7,235 billion in 2015, representing a CAGR of 5% between 2011 and Furthermore, the performance of the sector is forecast to follow a similar pattern with an anticipated CAGR of 4.8% for the periods, which is expected to drive the sector to a value of $9,154.8 billion by the end of BCG conducts research and analysis across a range of industries, including biopharmaceuticals, energy and environment, and health care payers and providers, among others. Positive growth in such end markets will result in the origin of new projects, thereby creating the demand for the company's consulting services. Threat Intense competition BCG operates in a highly competitive consultancy business and requires product and solution innovation on a regular basis to create and maintain competitive edge. The company faces competition from other large players in the consultancy market such as McKinsey, Accenture, Deloitte Consulting, Booz Allen, and Ernst & Young Global Limited. BCG also faces competition from companies that originated in the strategic consulting environment such as Bain & Company. Firms with core competence in IT solutions such as IBM, Capgemini, and Infosys entered and extended their presence in the consulting industry, bringing a new breed of innovations and solution design, allowing other smaller IT companies to do the same. This trend may put pressure on the margins of mainstream consultancy firms such as BCG. Intense competition in the marketplace may negatively impact BCG's growth in market share and margins. Prolonged recovery of European economy could impact demand Due to the current economic downturn, global recession is accelerating, with unemployment rising and overall economic activity falling. European regions are facing an economic slowdown in addition to the rise in inflation due to the current debt crisis. According to IMF, the growth in the Euro area is projected to remain weak and fragile as high debt and financial fragmentation hold back domestic demand. The GDP growth rate in the Euro area is expected to be 1.7% in 2016 and Outside the Euro zone, the IMF Page 6

7 SWOT Analysis forecasts that the UK will grow sluggishly by 2.2% in 2016 and Similarly, France is expected to grow at 1.3% and 1.5% in 2016 and 2017, respectively. Similar growth rates are projected in economies such as Denmark, the Netherlands, Poland, Sweden, Switzerland, Turkey, Greece, Ireland, and Portugal. The weak economic outlook in key European markets is expected to impact the growth of the company and negatively affect its financial position. Emergence of in-house consulting units In the recent years, there has been a global trend to entrust corporate in-house consulting units with core management consultancy tasks. Following the global recession, several companies around the world have focused on cost reduction activities, which resulted in the emergence of these in-house consulting units. In-house consulting has established itself as an alternative to external management consultancies. These units are organized as independent subsidiaries or as corporate service units in large companies globally. In-house consulting is growing and consequently, the demand for internal consultants has grown in strategic and operational projects. In addition, in-house consulting units are expected to have several advantages as compared to external consulting firms. For instance, the consultants within these units would be familiar with the company and its processes and are well-connected internally. This is expected to ensure quick solutions geared towards the company's needs. Emergence of these in-house consulting units could impact the consulting industry and reduce the demand for BCG's products and services in coming years. Page 7

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