Page 72 - DMGT547_INTERNATIONAL_MARKETING

Unit 3: Political Environment of International Marketing

Notes
towards an objective. Once we have identified a goal, we can start building structures,
systems, and an organisational framework that will help us achieve that goal. It is crucial
to have the big picture. That is where the importance of strategy lies…
Aren’t both these consultancy companies well known for their work on strategy?

Yes. Strategic Consultants is headquartered in New York, with 32 offices across the world
and over 500 consultants on its pay roll. It enjoys a formidable reputation in strategy
formulation. What interested me was the fact that it has done substantial work on the
automotive industry and has a senior partner, based in Frankfurt, who focuses exclusively
on the auto industry. The distinguishing feature of Strategic Consultants’ approach is an
underlying belief that strategy must be based on present data – not future trends. It will
identify for us those segments, channels, price-points, product-differentiators, selling-
propositions, and value-chain configurations that will yield us profits. But the identification
is focused strictly within the present framework of the auto components industry.
Incidentally, the firm has made it clear that it will not be involved in the implementation
process…
I am not very comfortable dealing with a consultant who stays away from implementation.
What about the second firm?
The sheet anchor of Transformation Consulting is just the opposite. It believes that the
purpose of strategy is not only to enable Auto Components to compete today, but also to
ensure that it remains competitive in a fluid market situation. The firm aims at
reconfiguration of the auto components sector to the advantage of Auto Components –
not just maximising the company’s profits.
Both the proposals I have received are well structured and cover a wide canvas although
I must mention that the fees quoted by them are quite high for a 3-month project. While
Transformation Consulting has quoted ` 12 lakh, Strategic Consultants has asked for a fee
of ` 17 lakh. The former says it will depute a senior partner and 3 associates, one of whom
will work full-time on our project. Strategic Consultants will depute a principal and two
associates on a part-time basis. But its offer is quite attractive since its partner will be
flown in from Frankfurt for all the major discussions…
The fee is, indeed, high. But it isn’t a major issue as long as the consultant delivers. My
concern is more about the organisational approach of the 2 consultancies…
Strategic Consultants’ approach is top-driven. It does not believe in involving employees
at different levels in formulating a strategy. It forms a team consisting of 2 senior managers
of the company and 2 of its consultants. The team lays down the strategy that, it thinks, is
good for the company. That is quite in contrast with Transformation Consulting’s approach,
which is both top-down and bottom-up. It seems the active involvement of employees,
who are asked to define the kind of organisation they want their company to be given, of
course, the changes that are expected in the future…
A Strategic Consultant is too focused on the present while Transformation Consulting
builds a vision for the future as part of its strategy. The latter’s approach is a radical
departure from the conventional route to strategy formulation. It is the novelty of the
approach that fascinates me…

Permit me to read out the relevant portions from Transformation Consulting’s report:
“Our methodology comprises 4 phases: Envisioning, External Analysis, Internal Analysis,
and Action Plan. These phases will be implemented during the course of 4 separate retreats
spread over 3 months at the company’s holiday-home at Lonavala (near Mumbai), where
all the senior managers of Auto Components will gather…
Contd...

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