In the Nordic countries there seem to pop up new consultancy shops left and right since the barriers of entry are practically zero as no start up capital is needed, there's no regulation and anyone can call themselves a strategy consultant. This has led to fierce competition where everyone offers more or less the same services with practically the same level of competence, with some exceptions (MBB and some tier 2 firms).
As a result of the price pressure and competition of consultancy services, there seems to be a trend in which consultant companies move in one of two directions:
a) Knowledge consulting (Pure strategy, think old MBB)
- Establishing itself as a premium consultancy mostly focused on strategy or industry/service expertise to justify higher hourly prices compared to competitors (most common for boutiques).
b) Resource consulting (Implementation and project management, filling a client line role)
- Turning more into resource consulting, where consultants step into a client organisation to fill a resource hole in a critical project. Competing on price, which leads to low hourly prices but manages to secure long projects with lots of consultants.
My take on this is that the consultancy companies taking the resource consulting direction are in for some tough times with low profitability, as traditional staffing companies (e.g. Manpower) move up the value chain and start to offer competing consultant services. And those consultancy companies who end up in the middle between knowledge consulting and resource consulting are done for in my humble opinion.
Curious if this is a Nordic occurrence or if similar things are happening elsewhere?
