Strategy consulting focuses on helping organizations develop and implement strategies to achieve their goals. It involves identifying and addressing high-level strategic issues, such as market positioning, mergers and acquisitions, and organizational design.
In this guide, we’ll discuss the benefits of strategy consulting for businesses, how much it costs, the key responsibilities of a strategy consultant, and the steps needed to become one.
Key Takeaways
- Strategy consultants are experts in their field and have no personal stake in the business, allowing them to provide objective insights.
- The cost of hiring strategy consulting services is around $800 and $1,500 but can increase depending on the experience of the consultant.
- The three main tasks of a strategy consultant are: researching and analyzing company goals and providing production strategy recommendations and budgeting and opportunity management advice.
Table of Contents
Why Is Strategy Consulting Important?
Strategy consulting helps a business develop better improvement strategies by providing an outside perspective. Strategy consultants have the time and expertise to focus on the core issues a company is facing.
These consultants are indispensable for their level-headedness. Unlike the board members, managers, and executives, strategy consultants do not have personal stakes in the business.
This implies that they are free from any preconceptions and biases that can cloud their judgment. In contrast, internal executives of the organization may struggle to see certain issues objectively.
Unbiased and focused, strategy consultants work strategically to guide organizations through impending crises.
What Does a Strategy Consultant Do?
Strategy consultants are experts in business strategy, corporate strategy, competitive strategy, and a range of analytical tools and frameworks to help clients make informed decisions.
Depending on the area of expertise, a strategy consultant identifies current and future opportunities and challenges before making recommendations. Here are three key tasks a strategy consultant performs:
1. Research and Analysis of Company Goals
Strategy consultants engage in detailed research and analysis of the goals and objectives of the client’s business. The primary purpose of this thorough analysis is to determine whether the organizations' existing practices align with what they want to achieve — a strategy many top business consulting firms also employ.
2. Offer Strategic and Production Strategy Recommendations
Based on the previous analysis, the consultants offer strategic recommendations organizations can implement in their production strategy to achieve better outcomes.
By recommending long-term goods and services production plans, a company can enhance efficiency in creating products, thus achieving its marketing goals and boosting revenue. Strategy consultants, especially those working in the public relations field, can also implement these recommendations after offering them.
Additionally, they provide expertise on the competitive landscape and market research to help the client make well-informed decisions for the betterment of the company.
3. Provide Budgeting and Opportunity Management Advice
Strategy consultants also offer opportunity management, which involves identifying new opportunities for revenue and product offerings. This closely relates to their other service — budgeting advice.
Since opportunity management points out new ways to increase revenue, strategy consultants also provide advice on how to allocate the budget for such actions. This advice comprises inputs on best practices to drive more revenue by cutting down costs.
Pros & Cons of Strategy Consulting
Now that we understand what a strategy consultant does, let’s look into the advantages and disadvantages of strategy consulting:
Pros
- Expert insights: By hiring strategy consultants, businesses get valuable insights into the market, budgeting, and more from proven professionals in the field. What’s more, these experts’ advice will be objective and unbiased, allowing you to fully benefit from their expertise.
- Saves time and money: With an expert to do the job for you, you don’t have to worry about the details, saving you time and money you’d usually spend learning it all on your own.
- Helps a business develop: Much like a business growth consultant, strategy consulting aims to help businesses grow by pinpointing strategies that are useful to the business. For instance, identifying the company’s market positioning and how to improve it, or suggesting mergers and acquisitions.
- Improves a business competitive stance: Strategy consulting also aims to help organizations gain a competitive advantage and achieve long-term success by giving opportunity management advice. This can be especially valuable for startups working on their small business management.
Cons
- Costs: Hiring a strategy consultant is not cheap, especially for small businesses. It costs anywhere from $800 to $20,000.
- Availability: Strategy consultants often have multiple clients. Inevitably, there may be times when a consultant has to prioritize one project over others, meaning they might not be always available for your needs.
- Knowledge limitation: For strategy consulting to work, the consultant must take the time to know the company, which requires both time and money. This process may also hinder the workflow of regular employees.
Strategy Consulting Cost
The cost of hiring a strategy consultant mainly depends on their expertise. In general, the cost ranges between $800 and $1,500, depending on different pricing models, such as:
- Hourly rates: You pay for the strategy consulting services on an hourly basis. These tend to be around $500.
- Daily rates: Some strategy consultants choose to set a daily rate, meaning you pay for the services rendered in one day (or more if you hire them for additional days). The rates here generally start at $1,000.
- Monthly rates: Also known as retainer pricing, you pay a monthly fee for ongoing strategy consulting services. This can be a one-time payment or a subscription. Usually, it ranges between $1,500 and $2,000 per month.
- Project-based: Some companies prefer hiring consultants for the whole length of the project. In that case, this pricing model is the best option; albeit the most expensive one. Strategy consultants working with this pricing model may charge more than $20,000 for the duration of the project.
How To Get Into Strategy Consulting in 4 Steps
Seeing the benefits strategy consulting has for a company, as well as the costs, it’s no wonder it’s becoming an increasingly popular career path.
If you’re interested in becoming a strategy consultant, here are the steps you should take:
Step 1: Get the Appropriate Degree
Strategy consulting firms typically seek candidates with strong analytical, problem-solving, and communication skills. Therefore, to get into strategy consulting, you should aim to obtain a degree in a related field such as business, economics, or engineering.
Additionally, develop skills in areas such as financial analysis, project management, and data analytics through relevant coursework, internships, or extracurricular activities.
In practice, consulting firms do not have definitive education standards for hiring strategy consultants or web consultants, although they often prefer MBA graduates.
Step 2: Gain Experience
Most strategy consulting firms prefer candidates with prior work experience. You can start by working in a relevant field such as finance, marketing, or operations.
You can also pursue internships or consulting roles to gain experience in strategy consulting and build your network. With experience, strategy consultants learn how to earn the trust of executives and ensure their advice is valued.
Step 3: Network and Build Connections
Networking and building connections in the consulting industry can be crucial for getting a foot in the door. Attend industry events and connect with alumni or professionals through LinkedIn.
Consider joining professional organizations related to consulting, such as the Institute of Management Consultants and The International Council of Management Consulting Institutes. This way, you can meet professionals in the industry and stay up to date on industry news and trends.
Step 4: Apply to Consulting Firms
Once you have gained the relevant skills and work experience, you can start applying to consulting firms. You should research the firms and identify those that align with your career goals.
Go for a strategic approach when applying for a job to maximize your chances of success. To effectively apply to a consulting firm, tailor your resume and cover letter. If you’re invited to an interview, make sure you are prepared.
Strategy Consulting Takeaways
Strategy consulting, apart from its apparent benefits for an organization, is also a fantastic network builder. A professional strategy consultant can gain a lot of new contacts in various industries and specialties.
Strategy consulting is all about critical thinking, and the best strategy consultants excel even during the most complex business transitional periods.
If you’re just starting your business and looking to grow with the guidance of a strategic consultant, consider hiring one of the small business consulting firms to lead the way.
Strategy Consulting FAQs
1. What is strategy consulting vs management consulting?
Strategy consulting is rightfully considered a subset of management consulting. However, while management consulting emphasizes the health and performance of the company, strategy consulting has to do more with specific goals and is more detail-oriented in that way.
2. What is the difference between consulting and strategic consulting?
Consulting typically provides expertise or advice on specific tasks or issues. Strategic consulting involves a broader approach, offering guidance on long-term planning, organizational development, and achieving overarching objectives.
3. What services do strategy consultants offer?
Strategy consultants provide services such as market analysis, competitive research, business planning, growth strategies, operational improvements, and organizational development to help businesses achieve their long-term goals and objectives.
