The global growth consulting market is now worth $3bn, and is expected to increase by ten per cent during 2014/15, according to a new report. Growth consulting helps organisations expand into new markets, develop new products and plan inorganic growth.
The report from leading global consulting market analysts, Source Information Services (Source), is based on a survey of over 700 clients, and reveals that most of the growth is expected to come from companies looking to develop products for existing markets. An operations director in the pharmaceuticals sector interviewed for the report supported this view, by saying: "Growth is about customer-centric innovation: it's not necessarily about further global expansion."
Hot sectors for growth consulting...
The most active 'growth' clients operate in the technology, media and telecoms sectors. Due to the ever changing nature of these industries, nearly all organisations (96 per cent) claimed to be investing in new products or services, and half claim this investment will increase their use of consulting firms.
Surprisingly, in the retail sector, the majority of organisations are looking to develop new products and services, with over three quarters (76 per cent) involving consulting firms.
Fiona Czerniawska, Joint Managing Director at Source Information Services, said:
"One of the most striking findings in this report is the huge reliance being placed on consultants in the retail sector. This suggests that help in understanding the application of new technology isn't the only reason why organisations use consultants.
"Perhaps what retailers are really after is help to integrate new technology into their core functions — as seamlessly weaving these new solutions into modernised organisational and operational processes — is at least as important as understanding the technology itself."
Success factors for growth consulting
The report uncovered three critical success factors for consulting firms looking to provide more growth services to their clients:
- Analytics — this is playing an increasingly big role in clients' thinking about their future growth plans, and they're the first to acknowledge that they lack both the capability and capacity to do the subject justice.
- Reach — thirst for knowledge, often at a very detailed, local level, clients want to tap into the reserves of information and experience the large consulting firms have amassed around the world.
- Speed — clients recognise that consultants can accelerate the process of getting a new product or service to market, or making the changes necessary for future growth.
Despite the enticing prospect of emerging markets, the Source report found that more growth is forecast to take place in existing markets. Developing new ideas to customers that an organisation knows well is always likely to be an organisation's first strategy for finding growth — however a lot of clients are at least looking at new markets. Around three quarters of companies from both mature and emerging economies believe that the economic grass could be greener in other parts of the world.
Those companies with concerns about the state of their domestic economy are naturally more interested in expanding to new territories. For instance, clients in Germany and Russia are looking to overseas markets as they are concerned about the weak Eurozone and the impact of the Ukraine crisis. These moves to different parts of the world offer perhaps the biggest opportunity for consulting firms as a new territory almost certainly requires a consulting firm that knows the local environment.
Fiona Czerniawska added:"Although there is a healthy prediction for growth in the industry, consultancies need to demonstrate their ability to innovate, analyse consumer trends and emulate successful organisations in order to convince clients to invest."