Management consulting in south africa

Pages: 35 (8651 mots) Publié le: 8 juillet 2010
The management consulting industry in South Africa – A strategic

The Management Consulting Industry (MCI) is considered to be one of the most powerful forces shaping organisational
strategy. However, from its major growth phase during the late 1980s into the 1990s, and until the present time, it now
appears that the industry is in a mature consolidation phase. Perhapseven an early decline. The scope and nature of the
MCI is global and, consequently, the South African industry is inextricably linked to and integrated with global
developments. The local industry is large in absolute terms and high in value-adding propensity. Vertical integration is
limited and little advantage appears to be taken of economics of scale. The industry moves in tandem withwell
established international driving forces and no inflection point is expected. Nevertheless, it is considered to be under
severe competitive pressures which impose a dampening effect on the overall level of industry profitability. The
competitive positions and profile of rival business strategic approaches display a degree of comparability in strategic
typologies. Thus, the challengefor the ‘winners’ in the MCI will be to differentiate themselves for both strategic and
marketing positioning and even to consider redefining the business model in this turbulent and fragmented industry.


The New Economy has transformed the world of business
on a global scale and organisations are being forced to
reinvent their activities. Flexibility, innovationand speed
have become key business priorities for survival (Butcher,
2000:24). When a storm hits, the natural instinct is to
retrench until the outlook improves, but in business, an
economic storm challenges organisations not only to simply
weather the downturn, but also to emerge stronger. With this
in mind, management consultants play an important role in
exploring new businessbasics that provide organisations
with survival tips for today and a blueprint for tomorrow’s

The global management consulting industry (MCI) has, for
many years, played an important role in crafting the
strategies of most of the top organisations in the world. The
insightful information gained from bringing in an external
management consultant was considered valuable andtherefore very expensive. This allowed the global MCI
industry to develop into an extremely lucrative and highly
sought-after professional body. In an era characterised by
the rapid succession of new management concepts claiming
to be the holy grail of competitive performance,
management consultancy enjoyed unprecedented demand in
the market of ideas (Roodt, 1997:32). Indeed, it is one ofthe
most powerful forces shaping organisational strategy (Ryan,

However, from its major growth phase during the late 1980s
into the 1990s, and until the present time, it appears that the
MCI has been negatively affected by global economic
factors (recession, globalisation, technology, terrorism) over
the last few years. It is now considered to be in a period of
majorconsolidation, both from the clients’ and consultants’
perspectives. This global situation has been increasingly
evident in South Africa and is forcing consulting firms to re-
look the way they do their business. It is consequently the
aim of this paper to:

1. Analyse the South Africa MCI,

2. Profile the current and expected strategies of rival
South African consulting firms,and

3. Make strategic recommendations to the local MCI.

Delimitation and plan of paper

Within the field of strategic management, two major
theoretical traditions have developed around the attempt to
explain the basis for competitive advantage and thus to
achieve above-average output performance. Firstly, the
classic Industrial Economics-Based theory (also known as 16...
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