Although management consulting and strategy consulting sound similar, there is a clear distinction between the two. The biggest difference is that strategy consulting is done at the executive level, usually with CEOs or a board of directors. The goal here is to determine long-term strategies that can be adopted for the company.
Another difference between management consulting and strategy consulting is that each of them is suitable for different business situations. Management consulting is more geared toward creating replicable methods that bring faster solutions for the issues that they were designed to handle. It also delivers functional excellence on a significant scale in any organization.
In comparison, strategy consulting lets an individual work in different industries. It takes a couple of months for a consultant plan to show how to cut costs, promote a new product, and so on. In simpler terms, strategy consulting has a more problem-solving approach. It goes directly to the needs of individual clients, and the aim is to satisfy them.
Another critical aspect of management consulting vs strategy consulting is that big companies and corporations hire strategy consultants that focus on policies within a specific niche. Management consultants usually get hired by various company sizes, and they can apply their knowledge to numerous domains. Learn below more about this topic in this article created by our team at Trafft.
Management consulting vs Strategy consulting
First, management consulting is also known as operational consulting. Management consulting aims to improve the functions of an organization. It focuses on bringing results in the short and medium-term to make work more effective. This usually leads to lower costs, and it connects with the following areas of a client’s business:
- Human Resources
- Risk Management
Typical management vs. strategy consulting approach would include:
All of this is done according to an organization’s goal to achieve it. As many consulting firms handle this, we can sum up that the big goal of management consulting is to increase the performance and efficiency of a firm.
Who needs management consulting?
Here are some reasons why hiring management consultants can be of help:
- Management consultants can be hired to track problems. Many times employees can be too close to a problem inside the organization to be able to spot it. This is the moment when a consultant can join and get to the bottom of what is going on.
- A consultant can be an extra staff member. A lot of money can be saved by a business when hiring consultants. This means that if you do not need full-time employees to perform a specific task, hiring consultants can be wiser. Another advantage of hiring a consultant is that an organization can also save extra money as they do not need to pay benefits to the consultant they decide to hire.
- A consultant can be the spark of the change. People do not like changes, but some of them are needed. A consultant can be brought to reflect on the changes that need to be implemented.
What skills are required?
In any industry, you will find competition, and this is also true for consultants. Some of the joint degrees that help in this field are any Masters in Business Administration or Management. These two are the most favored ones in management consulting.
Typically, both management consulting and strategy consulting also involve finance, risk management, and human resources skills. Besides those people, skills are also critical. This is because each task that a consultant has involves people or systems that are responsible for that. Communication is essential and talking with the client’s managers or employees is going to be part of your central focus. You do not want to be unfair or unjust.
What questions does it answer?
Management consulting focuses on the various functions that an organization performs. Usually, the question that the consultants ask is if the systems are working effectively. The next step is to find out how to increase efficiency as soon as possible.
Most of the time, the solution is related to lowering costs. Consultants can spot the difference between an organization that is staying in business or creating a strategic exit.
Top Consulting Firms
The biggest professional service firms today are:
These services are a great start to perform research on and understand the domain better. All the firms are quite active in management consulting and have some of the best results.
To continue with our comparison between management consulting and strategy consulting topic, we will now explore more details in regards to strategy consulting.
What is it about?
Consultants that handle strategy tend to put the focus on the future of an organization at a broad level. They consider what impact the organization can bring to its structure or operations by making smart changes. The end goal here is to increase the revenue of the client.
Strategy consulting is part of management consulting. By creating strategies that bring new tactics regarding the conduct of engagement most of the time, they deliver excellent results. It stands for how a company is doing in its industry and how inner marker forces can be obtained to get an edge over the competition.
Who should consider strategy consulting?
Strategy management consulting is excellent for entrepreneurs that are operating without any plan. Many entrepreneurs look at the industry they are in, compare the performance of their company, and make decisions based on what feels best for them. Companies can survive like this, but many may also go out of business.
A strategic management consultant can help by:
- When a company wants to launch a new product, will its competition be able to offer a better alternative? How can that be prevented?
- Do they want to increase their market share in the upcoming years? Or are they more focused on keeping what they have?
- Does a company want to collaborate with established companies that are in their industry? What is the best way to do this?
- How important is it that they control future developments in their industry? How do they market a product that matches future trends?
What skills are required?
If we compare management consulting and strategy consulting, it’s obvious that strategy is more difficult. Strategy consulting requires a deep analytical set of skills, as well as the application of strong problem-solving skills. On top of that, specific industry knowledge will be requested, depending on the focus. This next set of skills are more general but are still needed to start a career in strategy consulting.
- Analytical skills: Collect and inspect data to see where there are problems, then generate solutions together with the needed information about how to implement them.
- People skills: As a consultant, a lot of time will be spent dealing with the management to understand the problems that they are facing at this moment.
- Time management: Strategy consultants work in tight deadlines and making sure they are met is important.
- Flexibility: Even an expert still has a lot to learn. Being able to search for new and changing trends and information is helpful.
Usually, a strategy consultant is going to work for the CEO of the company. They work with the most significant issues an organization has to deal with. The results that they bring need to be done in a short time (usually 3-6 months) and have a considerable impact. This means that they do play an essential role in the future of a company.
What questions does it answer?
- What is the long-term vision of the company?
- And what should be the portfolio of the business?
- Why should we enter this market?
- What is the best way to extract value from the SUV division?
The top firms that handle strategy consulting are:
Questions are essential when considering the differences between management consulting and strategy consulting strategies. In the end, to achieve results, they need to perform a strong analyze, collect data, and act upon the results that are shown.
Ending thoughts on management consulting vs strategy consulting
In conclusion, these are the particularities regarding management consulting and strategy consulting. Hopefully, this article has helped answer some questions you may have had, and will help you choose properly for a business depending on the goals that it has.
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