The Boston Consulting Group: An Analysis

The Boston Consulting Group: An Analysis

In 1963 Bruce Henderson billed a total of $500 for his first month's work at the Boston Consulting Group. Little did he know that over the next 40 years, his company of 1 employee in Boston would grow to more than 2,600 employees throughout 37 countries, together, generating over $1 billion a year in profit. Today, with 60 offices worldwide, the company is prospering beyond Henderson's wildest dreams.

I selected this firm after seeing their list of areas of expertise. It was extensive. With almost 20 areas in which the firm specializes in, it was the last one on the list - travel and tourism - that caught my eye. I love to travel, and the thought crossed my mind that it must be interesting to do consulting work in that field. My decision was made. I wanted to know more about why consulting was needed in the travel and tourism industry as well as how it was done. To begin, I looked into the company as a whole to get some background before delving further into a specific area.

The Boston Consulting Group (BCG) is a firm that deals with strategic planning and general management. Their clients include those that are on the list of the 500 largest companies in North America, Asia, Europe and Australia, as well as smaller non-profits and government agencies. The mission of BCG is "to help leading-edge businesses gain lasting strategic and competitive advantage through a combination of breakthrough thinking, rigorous analysis and, applied creativity" (bcg.com). It is apparent from this mission statement that this consulting firm is focused on leadership and strategic thinking. In fact, numerous concepts that were developed by BCG consultants are now taught in leading business schools across the country. Concepts such as the experience curve, sustainable growth, and total shareholder value can all be attributed to BCG. "We see the essence of our work as a virtuous circle of insight, impact, and trust" (bcg.com). What distinguishes BCG from other consulting firm are these three core values. I would like to explore each of these notions further.

Insight - Henderson began this approach in 1963 when he "challenged companies to look beyond their core processes to recognize the dynamics of a changing world and the need to position themselves accordingly" (bcg.com). Henderson wanted his clients to see past the superficial problems they were faced with and look at the broader picture. These deeper insights into the world of business have led clients of BCG to gain a better understanding of the fundamentals of their own organization and a better sense of what it means to have value.

Impact - A typical client will approach BCG faced with a problem, looking for a solution. The consulting work that is done "...often makes possible either the success of an existing organization or the creation of entirely new ones" (bcg.com). The impact a consulting firm has on a client is significant and can potentially make or break that company. Along with recommending the correct steps to take toward a resolution, BCG focuses on implementing, by whatever means necessary, every strategy that is developed. Following up and helping the clients internalize the strategies is one of the keys to being a successful consulting agency.

Trust - While impact is one of the keys to success, so is trust. "We recognize that trust is the outcome of successful long-term relationships and, ultimately, the only firm footing from which any great leap of faith can originate" (bcg.com). As well as having a commitment to their client's success, BCG focuses much attention on its own employees. Ideas of entry level staff members, as well as upper management, are always considered. Trust must be established within an organization before it can be established outside of that organization. BCG has an impressive rate of retaining clients due to the trust that develops between the two parties.

Boston Consulting Group has an expansive array of areas in which they do consulting work - financial services to technology and communications to healthcare. None struck my interest, however, as did travel and tourism. My love for traveling led me to believe that perhaps consulting is something I could do in the industry. BCG works with the airline and hotel industries focusing their efforts on e-commerce. "BCG's Travel and Tourism practice is dedicated to ensuring that our clients not only adapt to the changes spurred by e-commerce, but emerge as the companies leading the way" (bcg.com). The notion of leadership, which the firm dedicates itself to, comes through here when talking about a specific industry. BCG notes the importance of companies taking advantage of challenges that arise. It is a way to gain influence over other companies who may feel threatened and do nothing about it. Whether it is issues related to e-commerce, costs, or distribution, BCG wants their clients to capture the aspect of leadership through different strategies. After researching a separate tourism consulting firm, Adventure Business Consultants, I found that the difference between the two was that, while BCG focused on leadership, ABC focused on marketing and profits. Although both firms' focus is on success, the focus is in different areas. This is what sets BCG