The Boston Consulting Group, one of the world's leading management consulting firms, announced this week that Richard I. Lesser has been elected its next President and Chief Executive Officer, effective January 1, 2013. Lesser, 49, is currently BCG's Chairman of North and South America, based in New York.
Lesser will succeed Hans-Paul Bürkner, 59, who will become Chairman next year after completing nine years as President and CEO. Under Bürkner's leadership, the firm has nearly tripled its revenues to $3.55 billion and nearly doubled its staff to 8,400. It has opened 17 new offices worldwide and established itself as a full-service management consultancy with global reach.
"BCG has been steadily gaining share on its competitors and is extremely well positioned to continue its growth trajectory," said Bürkner, who as CEO is based in Frankfurt and New York. "I have absolutely no doubt that with his inspiring leadership, Rich will bring many new ideas and take BCG to the next level."
Showing posts with label Boston Consulting Group. Show all posts
Showing posts with label Boston Consulting Group. Show all posts
Thursday, May 24, 2012
Thursday, March 1, 2012
The Boston Consulting Group Continues Its Strong Growth in 2011 and Announces Three New Offices
The Boston Consulting Group (BCG), one of the world's leading management consulting firms, has announced that it recently opened three new offices -- in Johannesburg, Chennai, and Geneva -- enlarging its global footprint to 75 offices in 42 countries.
The announcement follows a strong 2011 for BCG, with the firm posting a double-digit gain in worldwide revenues to $3.55 billion, up 16 percent over the previous year. At the same time, the firm increased its global consulting staff by almost 17 percent, to 5,600.
"BCG's strong and steady growth and our expanding global footprint are a real tribute to the talent of our people," said Hans-Paul Bürkner, BCG's President and CEO. "Even in these uncertain times, our people have an exceptional ability to work together with our clients to generate great value."
"While the global economy remains volatile," he continued, "it offers enormous opportunities for companies willing to make bold moves. By partnering with our clients and enabling their organizations, we are helping them to realize these opportunities, address their most critical challenges, and build sustainable competitive advantage."
Johannesburg is BCG's second office in Africa, following the 2010 opening of one in Casablanca. "Johannesburg reinforces our commitment to Africa and the vast opportunity we see there. Having an office in South Africa will enable us to better serve companies across the continent," said Bürkner.
Chennai is the fourth most populous metropolitan area in India. "Having set up our Mumbai office in 1995 and our Delhi office in 2001, the opening of Chennai is another milestone for us," Bürkner said. "We have a very strong reputation and brand in the region, which has helped us to ramp up our business in Chennai quickly."
Geneva marks the firm's second office in Switzerland. "Geneva is an important financial center and a critical location for working with businesses throughout Europe, as well as major international organizations like the World Economic Forum," said Bürkner.
A continuous emphasis on developing and retaining its people remains the firm's key driver of success, Bürkner noted. As an example, he cited the firm's consistently strong performance on third-party rankings like the FORTUNE "100 Best Companies to Work for" list (BCG ranked second overall in 2012 for the second straight year).
In addition, Bürkner said, the firm is broadening and deepening its specialist capabilities. Last year, it acquired Expand Research, a London-based market research firm that provides business and technology services to leading investment banks and wealth managers. It also recently formed a geoanalytics team that delivers powerful location-based analytics and leading-edge spatial visualizations to help clients solve some of their most challenging business problems.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 75 offices in 42 countries. For more information, please visit www.bcg.com.
The announcement follows a strong 2011 for BCG, with the firm posting a double-digit gain in worldwide revenues to $3.55 billion, up 16 percent over the previous year. At the same time, the firm increased its global consulting staff by almost 17 percent, to 5,600.
"BCG's strong and steady growth and our expanding global footprint are a real tribute to the talent of our people," said Hans-Paul Bürkner, BCG's President and CEO. "Even in these uncertain times, our people have an exceptional ability to work together with our clients to generate great value."
"While the global economy remains volatile," he continued, "it offers enormous opportunities for companies willing to make bold moves. By partnering with our clients and enabling their organizations, we are helping them to realize these opportunities, address their most critical challenges, and build sustainable competitive advantage."
Johannesburg is BCG's second office in Africa, following the 2010 opening of one in Casablanca. "Johannesburg reinforces our commitment to Africa and the vast opportunity we see there. Having an office in South Africa will enable us to better serve companies across the continent," said Bürkner.
Chennai is the fourth most populous metropolitan area in India. "Having set up our Mumbai office in 1995 and our Delhi office in 2001, the opening of Chennai is another milestone for us," Bürkner said. "We have a very strong reputation and brand in the region, which has helped us to ramp up our business in Chennai quickly."
Geneva marks the firm's second office in Switzerland. "Geneva is an important financial center and a critical location for working with businesses throughout Europe, as well as major international organizations like the World Economic Forum," said Bürkner.
A continuous emphasis on developing and retaining its people remains the firm's key driver of success, Bürkner noted. As an example, he cited the firm's consistently strong performance on third-party rankings like the FORTUNE "100 Best Companies to Work for" list (BCG ranked second overall in 2012 for the second straight year).
In addition, Bürkner said, the firm is broadening and deepening its specialist capabilities. Last year, it acquired Expand Research, a London-based market research firm that provides business and technology services to leading investment banks and wealth managers. It also recently formed a geoanalytics team that delivers powerful location-based analytics and leading-edge spatial visualizations to help clients solve some of their most challenging business problems.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 75 offices in 42 countries. For more information, please visit www.bcg.com.
Thursday, January 26, 2012
BCG Provides Perspective on The Great Transformation, This Year's World Economic Forum Theme in Davos
As the annual World Economic Forum summit in Davos delves into "The Great Transformation: Taking Decisive Action in an Era of Extreme Uncertainty," The Boston Consulting Group (BCG) is sharing insights on subjects central to this year's discussion. They include growth during a period of unprecedented debt; the increasing importance of adaptability and flexibility in leadership teams; the struggle to define and embrace sustainability; and the manner in which technology is driving society, challenging even the most successful businesses on a daily basis. (Read more about the World Economic Forum meeting in Davos on bcgperspectives.com.)
"Never before have corporate leaders faced such a convergence of major social, political, and economic changes. This truly is the age of the Great Transformation -- and it presents today's managers with a once-in-a-generation test of leadership," says BCG president and CEO Hans-Paul Buerkner in a commentary on bcgperspectives.com.
"Perhaps not surprisingly, given the daily drip-drip-drip of depressing economic news, many business leaders in developed markets are focused on the macroeconomic uncertainty. But it would be a major mistake to hunker down, keep ambitions in check, and try to preserve the status quo. Yet the new reality is that the world has become highly unpredictable, and companies must understand the cost of passivity. If the risks are great, the opportunities are greater," he adds.
Among the thinking and topics on bcgperspectives.com that help frame the debates in Davos:
Growth and Employment
Before many companies address the question of what scenarios to expect and how to prepare and plot their strategic course, they need to come to terms with the root of the problems they're facing: the West is drowning in debt, and economic policies of "kicking the can down the road" are failing. (see "what next? where next? what to expect and how to prepare" and "stop kicking the can down the road:The Price of Not Addressing the Root Causes of the Crisis.")
Leadership and Innovation: The Importance of Teamwork and Adaptiveness
BCG research among 100 executives in a range of industries shows that companies with adaptive leadership teams outperform their peers -- in a variety of environments. The research, which is especially relevant in an era of great transformation, disproves some common fallacies about teamwork and adapativeness. For instance, observers often claim that as companies get bigger, they get less adaptive. The research found this not to be true. Observers also say adaptability often implies a lack of discipline. But the research found that adaptive teams have highly disciplined mechanisms and processes that free them up to be more adaptive. (see "the five traits of highly adaptive leadership teams:What Senior Leaders Do Differently.")
The Sustainability Question
A key issue for many businesses is that not all of them have found ways to profit from their sustainability efforts, but those that have share some interesting characteristics -- such as a willingness to collaborate with external groups and a strong CEO commitment to the cause. Still, a BCG study suggests that companies are struggling to define sustainability in a way that is relevant to their businesses. (See "Sustainability Nears a Tipping Point.")
Society and Technology: What the Combination Means for Competitiveness
Today, consumers are gaining increasing control in the buyer-seller relationship through the rapid emergence of feature-rich mobile devices, social networking, and cloud computing. This presents significant challenges to businesses.
Brick-and-mortar retailers are leveraging the mobile trend to improve customer service in their stores and to distribute offers that tap into the available time and present location of potential customers. For instance, Tesco's Homeplus has opened a virtual store in a Seoul subway station. Commuters waiting for their train can order goods by scanning codes with their smartphones and have the products delivered to their homes. And e-tailers continue to threaten traditional stores with innovations such as the new Amazon Remembers tool, which could turn brick-and-mortar shops into showrooms for Amazon.com. Shoppers in a store can snap a picture of a product with their mobile phones, and the photo is automatically uploaded to Amazon.com, which then searches for a similar product. Customers can purchase the Amazon product immediately or "remember it" in their Amazon account. A new application from Amazon called Flow brings together barcode scanners and multimedia content to make in-store price comparisons even easier. (see "multichannel 3.0:The Mobile Revolution.")
Other Davos-relevant pieces on www.bcgperspectives.com address workplace wellness, global aging, a "many city" growth strategy, the global talent gap, and how to get people to solve problems without you.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit bcg.com.
About bcgperspectives.com
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
"Never before have corporate leaders faced such a convergence of major social, political, and economic changes. This truly is the age of the Great Transformation -- and it presents today's managers with a once-in-a-generation test of leadership," says BCG president and CEO Hans-Paul Buerkner in a commentary on bcgperspectives.com.
"Perhaps not surprisingly, given the daily drip-drip-drip of depressing economic news, many business leaders in developed markets are focused on the macroeconomic uncertainty. But it would be a major mistake to hunker down, keep ambitions in check, and try to preserve the status quo. Yet the new reality is that the world has become highly unpredictable, and companies must understand the cost of passivity. If the risks are great, the opportunities are greater," he adds.
Among the thinking and topics on bcgperspectives.com that help frame the debates in Davos:
Growth and Employment
Before many companies address the question of what scenarios to expect and how to prepare and plot their strategic course, they need to come to terms with the root of the problems they're facing: the West is drowning in debt, and economic policies of "kicking the can down the road" are failing. (see "what next? where next? what to expect and how to prepare" and "stop kicking the can down the road:The Price of Not Addressing the Root Causes of the Crisis.")
Leadership and Innovation: The Importance of Teamwork and Adaptiveness
BCG research among 100 executives in a range of industries shows that companies with adaptive leadership teams outperform their peers -- in a variety of environments. The research, which is especially relevant in an era of great transformation, disproves some common fallacies about teamwork and adapativeness. For instance, observers often claim that as companies get bigger, they get less adaptive. The research found this not to be true. Observers also say adaptability often implies a lack of discipline. But the research found that adaptive teams have highly disciplined mechanisms and processes that free them up to be more adaptive. (see "the five traits of highly adaptive leadership teams:What Senior Leaders Do Differently.")
The Sustainability Question
A key issue for many businesses is that not all of them have found ways to profit from their sustainability efforts, but those that have share some interesting characteristics -- such as a willingness to collaborate with external groups and a strong CEO commitment to the cause. Still, a BCG study suggests that companies are struggling to define sustainability in a way that is relevant to their businesses. (See "Sustainability Nears a Tipping Point.")
Society and Technology: What the Combination Means for Competitiveness
Today, consumers are gaining increasing control in the buyer-seller relationship through the rapid emergence of feature-rich mobile devices, social networking, and cloud computing. This presents significant challenges to businesses.
Brick-and-mortar retailers are leveraging the mobile trend to improve customer service in their stores and to distribute offers that tap into the available time and present location of potential customers. For instance, Tesco's Homeplus has opened a virtual store in a Seoul subway station. Commuters waiting for their train can order goods by scanning codes with their smartphones and have the products delivered to their homes. And e-tailers continue to threaten traditional stores with innovations such as the new Amazon Remembers tool, which could turn brick-and-mortar shops into showrooms for Amazon.com. Shoppers in a store can snap a picture of a product with their mobile phones, and the photo is automatically uploaded to Amazon.com, which then searches for a similar product. Customers can purchase the Amazon product immediately or "remember it" in their Amazon account. A new application from Amazon called Flow brings together barcode scanners and multimedia content to make in-store price comparisons even easier. (see "multichannel 3.0:The Mobile Revolution.")
Other Davos-relevant pieces on www.bcgperspectives.com address workplace wellness, global aging, a "many city" growth strategy, the global talent gap, and how to get people to solve problems without you.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit bcg.com.
About bcgperspectives.com
Bcgperspectives.com is a new website -- available on PC, mobile phone, and iPad -- that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
Friday, January 20, 2012
The Boston Consulting Group Ranks No. 2 Among FORTUNE's Best Companies to Work For... Again
The Boston Consulting Group (BCG), one of the world's leading management consulting firms, has ranked number two on FORTUNE's "100 Best Companies to Work For" list for the second year in a row. It has also captured the top spot among small companies for the fifth time and become one of only two firms to be ranked in the top dozen for seven straight years.
An emphasis on investment in its people, career flexibility and mobility, extensive training, high-impact client work, a collaborative culture, progressive benefits, and a commitment to social-impact work were all factors that contributed to the strong showing -- the best among consulting firms by far for the seventh year in a row.
"A perennial of the top five of our list, the global consultancy invests 100-plus hours and thousands of dollars to recruit each consultant," FORTUNE says of BCG. An online profile of one of those consultants, David Potere, discusses how he was able to chart his own course and build a global geoanalytics team based in Boston. "Potere was able to convince the company to create [his team] only 18 months after he was hired," notes the magazine. (For the full profile, see fortune.com.)
BCG also achieved the top ranking as best "small" company (defined as companies with fewer than 2,500 employees in the United States) and was cited as one of the most diverse companies overall, with 45 percent female and 27 percent minority employees. BCG is one of 14 companies on the list to pay 100 percent of employees' health-care premiums, one of 25 to offer fully paid sabbaticals, and one of several hailed for having "gay-friendly benefits" and a "gay-friendly policy." It is also in the top 10 for annual pay for salaried employees.
"We are very pleased and honored to be ranked so high on FORTUNE's Best Companies list," said Rich Lesser, BCG's chairman of North and South America. "The fact that we've stayed in the top dozen for seven consecutive years is a testament to our continued focus on making BCG a great place to work."
Added Lesser: "Attracting top talent and maintaining an environment in which employees can rapidly develop have been key to our success and our ability to deliver enormous value to clients. Recognitions like this are a nice acknowledgment that our efforts are highly unusual and, based on our growth and client retention, effective."
This year's 100 Best Companies list and related stories appear in the February 6 issue of FORTUNE, available on newsstands on Monday, January 23, and now online at fortune.com/bestcompanies.
To arrange an interview with BCG, please contact Dave Fondiller at 212 446 3257 or fondiller.david@bcg.com.
About FORTUNE's Best Companies Methodology
To pick the 100 Best Companies to Work For, FORTUNE partners with the Great Place to Work Institute to conduct the most extensive employee survey in corporate America; 280 firms participated in this year's survey. More than 246,000 employees at those companies responded to a survey created by the institute, a global research and consulting firm operating in 45 countries around the world. Two-thirds of a company's score is based on the results of the institute's Trust Index survey, which is sent to a random sample of employees from each company. The survey asks questions related to their attitudes about management's credibility, job satisfaction, and camaraderie. The other third is based on responses to the institute's Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended questions about hiring practices, methods of internal communication, training, recognition programs, and diversity efforts. After evaluations are completed, if news about a company comes to light that may significantly damage employees' faith in management, we may exclude it from the list. Any company that is at least five years old and has more than 1,000 U.S. employees is eligible. For information on how to apply, visit www.greatplacetowork.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com.
An emphasis on investment in its people, career flexibility and mobility, extensive training, high-impact client work, a collaborative culture, progressive benefits, and a commitment to social-impact work were all factors that contributed to the strong showing -- the best among consulting firms by far for the seventh year in a row.
"A perennial of the top five of our list, the global consultancy invests 100-plus hours and thousands of dollars to recruit each consultant," FORTUNE says of BCG. An online profile of one of those consultants, David Potere, discusses how he was able to chart his own course and build a global geoanalytics team based in Boston. "Potere was able to convince the company to create [his team] only 18 months after he was hired," notes the magazine. (For the full profile, see fortune.com.)
BCG also achieved the top ranking as best "small" company (defined as companies with fewer than 2,500 employees in the United States) and was cited as one of the most diverse companies overall, with 45 percent female and 27 percent minority employees. BCG is one of 14 companies on the list to pay 100 percent of employees' health-care premiums, one of 25 to offer fully paid sabbaticals, and one of several hailed for having "gay-friendly benefits" and a "gay-friendly policy." It is also in the top 10 for annual pay for salaried employees.
"We are very pleased and honored to be ranked so high on FORTUNE's Best Companies list," said Rich Lesser, BCG's chairman of North and South America. "The fact that we've stayed in the top dozen for seven consecutive years is a testament to our continued focus on making BCG a great place to work."
Added Lesser: "Attracting top talent and maintaining an environment in which employees can rapidly develop have been key to our success and our ability to deliver enormous value to clients. Recognitions like this are a nice acknowledgment that our efforts are highly unusual and, based on our growth and client retention, effective."
This year's 100 Best Companies list and related stories appear in the February 6 issue of FORTUNE, available on newsstands on Monday, January 23, and now online at fortune.com/bestcompanies.
To arrange an interview with BCG, please contact Dave Fondiller at 212 446 3257 or fondiller.david@bcg.com.
About FORTUNE's Best Companies Methodology
To pick the 100 Best Companies to Work For, FORTUNE partners with the Great Place to Work Institute to conduct the most extensive employee survey in corporate America; 280 firms participated in this year's survey. More than 246,000 employees at those companies responded to a survey created by the institute, a global research and consulting firm operating in 45 countries around the world. Two-thirds of a company's score is based on the results of the institute's Trust Index survey, which is sent to a random sample of employees from each company. The survey asks questions related to their attitudes about management's credibility, job satisfaction, and camaraderie. The other third is based on responses to the institute's Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended questions about hiring practices, methods of internal communication, training, recognition programs, and diversity efforts. After evaluations are completed, if news about a company comes to light that may significantly damage employees' faith in management, we may exclude it from the list. Any company that is at least five years old and has more than 1,000 U.S. employees is eligible. For information on how to apply, visit www.greatplacetowork.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com.
Wednesday, December 21, 2011
The Boston Consulting Group Announces Middle East Management Changes Amid New Growth Plans
The Boston Consulting Group (BCG), a global management consulting firm, has recently announced a spate of management changes as part of its expansion plans for the Middle East.
Spearheading the development is the appointment of Joerg Hildebrandt, Partner and Managing Director, as Head of BCG's Middle East operations. In addition to this announcement, Francesco Palmieri and Ganesh Mohan were appointed as Partners for the Middle East. It is expected that these new roles will further strengthen BCG's business in the region.
Dr. Klaus Kessler, Senior Partner and Managing Director and previous Head of BCG's offices in the Middle East, commented: "I am delighted to announce the appointment of Joerg Hildebrandt as the new Head of BCG's offices in the Middle East. Joerg already leads our Middle East Technology, Media and Telecommunications practice and has been instrumental in establishing BCG's presence in the region. We are confident that under his leadership, BCG will continue to be the advisor of choice for Middle East businesses. We are also pleased to announce the promotion of Ganesh and Francesco as BCG Partners."
Joerg Hildebrandt is a core member of BCG's Technology, Media & Telecommunications practice globally and has extensive international experience in Europe, Middle East, Africa and Asia. He also advises Middle Eastern public sector clients on strategy and operational topics.
Commenting on his new role, Hildebrandt said: "The Middle East is an important area of focus for BCG and I am honoured to have the opportunity to play a bigger role in the management of our operations in the region. I am looking forward to building on the strong foundations that our team has already laid. I would also like to congratulate Francesco and Ganesh on their new roles".
Francesco Palmieri joined BCG in 2007 as a Principal. During his tenure at BCG, he has been actively involved in oil and gas cases supporting IOCs sand NOCs in Europe, Middle East, North Africa and Asia. Prior to joining BCG, he worked as a Senior Manager at Arthur D. Little where he spent 8 years with a focus on oil & gas downstream and upstream sectors. Palmieri graduated in Engineering (magna cum laude) from Rome University in Italy.
Ganesh Mohan joined BCG in 1998 and has since worked in the Dubai, Dallas, Lisbon, New Delhi, and Mumbai offices of the firm. He is a core member of BCG's Financial Institutions practice and prior to his appointment as Partner, he was a Principal at BCG Middle East. Mohan graduated from the Indian Institute of Technology, Kharagpur with a B.Tech (Hons.) in Chemical Engineering and obtained his MBA from the Indian Institute of Management, Calcutta.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep in sight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries.
BCG serves the Middle East from Abu Dhabi and Dubai. Our offices there, in conjunction with the BCG office in Casablanca, play a key role in serving clients in the rapidly developing Gulf region as well as Middle East North Africa (MENA). To date BCG has successfully conducted assignments in the Middle East serving clients across a wide range of sectors, including government, financial services, energy, industrial goods, telecommunications, real estate, healthcare and private equity.
For more information, please visit http://www.bcg.com.
About bcgperspectives.com
Bcgperspectives.com is a new website--available on PC, mobile phone, and iPad--that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content--including videos, podcasts, commentaries, and reports--can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
Spearheading the development is the appointment of Joerg Hildebrandt, Partner and Managing Director, as Head of BCG's Middle East operations. In addition to this announcement, Francesco Palmieri and Ganesh Mohan were appointed as Partners for the Middle East. It is expected that these new roles will further strengthen BCG's business in the region.
Dr. Klaus Kessler, Senior Partner and Managing Director and previous Head of BCG's offices in the Middle East, commented: "I am delighted to announce the appointment of Joerg Hildebrandt as the new Head of BCG's offices in the Middle East. Joerg already leads our Middle East Technology, Media and Telecommunications practice and has been instrumental in establishing BCG's presence in the region. We are confident that under his leadership, BCG will continue to be the advisor of choice for Middle East businesses. We are also pleased to announce the promotion of Ganesh and Francesco as BCG Partners."
Joerg Hildebrandt is a core member of BCG's Technology, Media & Telecommunications practice globally and has extensive international experience in Europe, Middle East, Africa and Asia. He also advises Middle Eastern public sector clients on strategy and operational topics.
Commenting on his new role, Hildebrandt said: "The Middle East is an important area of focus for BCG and I am honoured to have the opportunity to play a bigger role in the management of our operations in the region. I am looking forward to building on the strong foundations that our team has already laid. I would also like to congratulate Francesco and Ganesh on their new roles".
Francesco Palmieri joined BCG in 2007 as a Principal. During his tenure at BCG, he has been actively involved in oil and gas cases supporting IOCs sand NOCs in Europe, Middle East, North Africa and Asia. Prior to joining BCG, he worked as a Senior Manager at Arthur D. Little where he spent 8 years with a focus on oil & gas downstream and upstream sectors. Palmieri graduated in Engineering (magna cum laude) from Rome University in Italy.
Ganesh Mohan joined BCG in 1998 and has since worked in the Dubai, Dallas, Lisbon, New Delhi, and Mumbai offices of the firm. He is a core member of BCG's Financial Institutions practice and prior to his appointment as Partner, he was a Principal at BCG Middle East. Mohan graduated from the Indian Institute of Technology, Kharagpur with a B.Tech (Hons.) in Chemical Engineering and obtained his MBA from the Indian Institute of Management, Calcutta.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep in sight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries.
BCG serves the Middle East from Abu Dhabi and Dubai. Our offices there, in conjunction with the BCG office in Casablanca, play a key role in serving clients in the rapidly developing Gulf region as well as Middle East North Africa (MENA). To date BCG has successfully conducted assignments in the Middle East serving clients across a wide range of sectors, including government, financial services, energy, industrial goods, telecommunications, real estate, healthcare and private equity.
For more information, please visit http://www.bcg.com.
About bcgperspectives.com
Bcgperspectives.com is a new website--available on PC, mobile phone, and iPad--that features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back almost 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content--including videos, podcasts, commentaries, and reports--can be accessed via PC, mobile, iPad, Facebook, Twitter, and LinkedIn.
Tuesday, October 4, 2011
The Boston Consulting Group Unveils New Online Platform Designed to Give Unprecedented Access to Its Vast Repository of Research, Analysis, and Commen
The Boston Consulting Group (BCG) is today unveiling a new online platform designed to make its research, analysis, insights, and commentary more widely, fully, and readily available to the global business community.
The website -- bcgperspectives.com -- offers unprecedented access to BCG's latest thinking as well as ideas and concepts dating back to the time of Bruce Henderson, who founded the firm in 1963 and is widely recognized as one of the architects of modern management thinking.
It is intended to serve as a forum for debate on current business issues as well as a reference point for business and other leaders as they grapple with the challenges of managing their organizations in these turbulent times.
The website -- which draws its name from the firm's groundbreaking series of pamphlets that launched in the 1960s and 1970s such concepts as the growth-share matrix and the experience curve -- covers a host of different topics relevant to senior and middle managers, academics, and leaders in the public and social sectors. These range from the renaissance in U.S. manufacturing to competing in China and from capturing the growth of the female economy to leveraging technology in education.
"Throughout our history, BCG has been a catalyst for change in the world of business and beyond. We have always devoted substantial resources to developing innovative ideas and insights along with techniques to help managers solve some of their toughest problems," said BCG President and CEO Hans-Paul Buerkner. "In today's volatile and fast-moving environment, we think it's more important than ever to make our rich store of intellectual capital available to the global business community."
The breadth and depth of the content on bcgperspectives.com reflect BCG's extensive expertise across numerous industries, functions, and regions. Today, BCG has 15 practice areas, with experts based in 74 offices around the world. Eight practices focus on industries and business sectors: Consumer, Energy & Environment, Financial Institutions, Health Care, Industrial Goods, Insurance, Public Sector, and Technology, Media & Telecommunications. Seven practices focus on functions and capabilities: Corporate Development, Global Advantage, Information Technology, Marketing and Sales, Operations, Organization, and Strategy.
In addition to these specialist practices, BCG leads a Sustainability Initiative and several institutes and centers, including the Strategy Institute, the Institute for Organization, and the Center for Consumer Insight. The work of BCG Fellows, who are among the firm's most accomplished thinkers and doers, is also featured on the website.
The website -- updated on a weekly basis -- spotlights flagship reports, articles, and opinion pieces, as well as video interviews, podcasts, and data-rich interactive graphics.
Antonella Mei-Pochtler, a senior partner at BCG who runs the media practice, heads the firm's marketing operations, and leads the development of the online platform, said: "We know that, in these turbulent times, senior business leaders are looking for ideas, practical insights, and solutions to their daily challenges -- and doing so 24-7. This is why we have made our content accessible online via multiple platforms. As a result, we hope that, wherever they are, our clients -- and the broader business community -- can draw inspiration from and engage with us on the reports, articles, and multimedia they find on bcgperspectives.com."
Officially being launched to the public today, bcgperspectives.com opens with "Leading Transformation," a package of articles and videos that features interviews with 11 CEOs, including David Brennan of AstraZeneca, Christopher J. Nassetta of Hilton Worldwide, and Irene Rosenfeld of Kraft Foods.
Other notable content includes an analysis of the world's top value-creating companies; the future of technology in the post-PC world; and research undertaken in collaboration with the World Economic Forum on emerging-market companies that are demonstrating unlikely leadership and ingenuity in innovating ways to overcome natural-resource constraints and address other sustainability issues.
"Ever since the days of Bruce Henderson, BCG has been producing provocative business thinking and analysis and devising solutions to the thorniest problems facing the leaders of organizations -- whether companies, governments, or NGOs," said Simon Targett, BCG's editor in chief, who oversees the firm's editorial activities and global media relations. "The new website will allow us to deliver our ideas and insights in a timely and topical way. We hope that a broad range of people will make bcgperspectives.com a regular must-visit online destination."
For more information, please contact Eric Gregoire at gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com.
The website -- bcgperspectives.com -- offers unprecedented access to BCG's latest thinking as well as ideas and concepts dating back to the time of Bruce Henderson, who founded the firm in 1963 and is widely recognized as one of the architects of modern management thinking.
It is intended to serve as a forum for debate on current business issues as well as a reference point for business and other leaders as they grapple with the challenges of managing their organizations in these turbulent times.
The website -- which draws its name from the firm's groundbreaking series of pamphlets that launched in the 1960s and 1970s such concepts as the growth-share matrix and the experience curve -- covers a host of different topics relevant to senior and middle managers, academics, and leaders in the public and social sectors. These range from the renaissance in U.S. manufacturing to competing in China and from capturing the growth of the female economy to leveraging technology in education.
"Throughout our history, BCG has been a catalyst for change in the world of business and beyond. We have always devoted substantial resources to developing innovative ideas and insights along with techniques to help managers solve some of their toughest problems," said BCG President and CEO Hans-Paul Buerkner. "In today's volatile and fast-moving environment, we think it's more important than ever to make our rich store of intellectual capital available to the global business community."
The breadth and depth of the content on bcgperspectives.com reflect BCG's extensive expertise across numerous industries, functions, and regions. Today, BCG has 15 practice areas, with experts based in 74 offices around the world. Eight practices focus on industries and business sectors: Consumer, Energy & Environment, Financial Institutions, Health Care, Industrial Goods, Insurance, Public Sector, and Technology, Media & Telecommunications. Seven practices focus on functions and capabilities: Corporate Development, Global Advantage, Information Technology, Marketing and Sales, Operations, Organization, and Strategy.
In addition to these specialist practices, BCG leads a Sustainability Initiative and several institutes and centers, including the Strategy Institute, the Institute for Organization, and the Center for Consumer Insight. The work of BCG Fellows, who are among the firm's most accomplished thinkers and doers, is also featured on the website.
The website -- updated on a weekly basis -- spotlights flagship reports, articles, and opinion pieces, as well as video interviews, podcasts, and data-rich interactive graphics.
Antonella Mei-Pochtler, a senior partner at BCG who runs the media practice, heads the firm's marketing operations, and leads the development of the online platform, said: "We know that, in these turbulent times, senior business leaders are looking for ideas, practical insights, and solutions to their daily challenges -- and doing so 24-7. This is why we have made our content accessible online via multiple platforms. As a result, we hope that, wherever they are, our clients -- and the broader business community -- can draw inspiration from and engage with us on the reports, articles, and multimedia they find on bcgperspectives.com."
Officially being launched to the public today, bcgperspectives.com opens with "Leading Transformation," a package of articles and videos that features interviews with 11 CEOs, including David Brennan of AstraZeneca, Christopher J. Nassetta of Hilton Worldwide, and Irene Rosenfeld of Kraft Foods.
Other notable content includes an analysis of the world's top value-creating companies; the future of technology in the post-PC world; and research undertaken in collaboration with the World Economic Forum on emerging-market companies that are demonstrating unlikely leadership and ingenuity in innovating ways to overcome natural-resource constraints and address other sustainability issues.
"Ever since the days of Bruce Henderson, BCG has been producing provocative business thinking and analysis and devising solutions to the thorniest problems facing the leaders of organizations -- whether companies, governments, or NGOs," said Simon Targett, BCG's editor in chief, who oversees the firm's editorial activities and global media relations. "The new website will allow us to deliver our ideas and insights in a timely and topical way. We hope that a broad range of people will make bcgperspectives.com a regular must-visit online destination."
For more information, please contact Eric Gregoire at gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries. For more information, please visit www.bcg.com.
Wednesday, June 1, 2011
The Boston Consulting Group: Global Wealth Continues Its Strong Recovery with $9 Trillion Gain, but Pressures on Wealth Managers Persist
Propelled by growth in nearly every region, global wealth continued a solid recovery in 2010, increasing by 8.0 percent, or $9 trillion, to a record of $121.8 trillion.1 That level was about $20 trillion above where it stood just two years prior during the depths of the financial crisis, according to a new study by The Boston Consulting Group (BCG).
Findings from the study appear in BCG’s eleventh annual Global Wealth report titled Shaping a New Tomorrow: How to Capitalize on the Momentum of Change, which was released today at a press briefing in New York. Among the other key findings:
The strong performance of the financial markets accounted for the lion’s share (59 percent) of the growth in AuM. Its impact was amplified by the ongoing reallocation of wealth. From year-end 2008 through 2010, the share of wealth held in equities increased from 29 percent to 35 percent. “During the crisis, cash was king,” said Monish Kumar, a BCG senior partner and a coauthor of the report. “Since then, clients have been steering their assets back into riskier investments.” North America continued to have the highest proportion of wealth held in equities—44 percent, up from 41 percent in 2009.
“The wealth management industry has overcome tremendous adversity over the past several years, and the sustained recovery of global wealth bodes well for its future,” added Kumar, who is the global leader of asset and wealth management at BCG. “But the positive signs should not be misread as a return to normal. A number of disruptive forces, including increased regulatory oversight and changes in client behavior, are rewriting the rules of the game—both literally and figuratively.”
Millionaire Households Grow in Number and Wealth
Millionaire households represented just 0.9 percent of all households but owned 39 percent of global wealth, up from 37 percent in 2009. The number of millionaire households increased by 12.2 percent in 2010 to about 12.5 million.
This year, for the first time, BCG published figures on the countries with the highest number of “ultra-high-net-worth” (UHNW) households, defined as those with more than $100 million in AuM. The United States had the largest number of these super-wealthy households (2,692), while Saudi Arabia had the highest concentration of UHNW households, measured per 100,000 households, at 18, followed by Switzerland (10), Hong Kong (9), Kuwait (8), and Austria (8). China experienced the fastest growth in the number of super-wealthy households, which jumped by more than 30 percent to 393.
Pressures Continue to Mount for Offshore Private Banks
The amount of offshore wealth—defined as assets booked in a country where the investor has no legal residence or tax domicile—increased to $7.8 trillion in 2010, up from $7.5 trillion in 2009. At the same time, however, the percentage of wealth held offshore slipped to 6.4 percent, down from 6.6 percent in 2009. The decline was the result of strong asset growth in countries where offshore wealth is less prominent, such as China, as well as stricter regulations in Europe and North America, which prompted clients to move their wealth back onshore.
“Offshore private banking remains a tumultuous part of the business,” said Anna Zakrzewski, a BCG principal and a coauthor of the report. “The relative importance of offshore centers is changing rapidly. Some are benefiting from continued asset growth, while others are suffering large asset outflows, with wealth being repatriated to onshore banks, transferred to other offshore centers, redirected into nonfinancial investments, or simply spent at a faster rate.”
For most clients, however, the core value proposition of offshore banking remains, Zakrzewski said. “Offshore wealth managers offer a sense of stability and security that these clients cannot find in their home countries. Other clients value the expertise or access to certain investments provided by offshore private banks. To continue to grow, offshore wealth managers will need to adapt to the changes imposed by the push for greater transparency while accentuating their strengths in areas that remain extremely relevant to clients around the world.”
Mixed Results for Wealth Managers
To gauge the performance of wealth managers (both private banks and wealth management units of large universal-banking groups), BCG gathered benchmarking data from 120 wealth-management institutions worldwide. The survey revealed wide variations in margins, cost ratios, and AuM growth across and within regions. On the whole, the industry experienced mixed results. The average pretax profit margin of wealth managers increased by 4 basis points to 23 basis points in 2010. In most regions, however, revenue margins remained lower than they were before the crisis (and in some places continued to decline), while cost-to-income ratios remained higher (and in some places continued to rise).
“In some markets, changes in regulations and client behavior have had a profound impact on wealth managers,” said Peter Damisch, a BCG partner and a coauthor of the report. “Especially in parts of Europe, clients are becoming more price sensitive, demanding more price transparency, and still avoiding higher-margin products.”
He continued, “For most wealth managers, pricing remains a vastly underutilized tool for improving revenue margins. At many wealth-management institutions, pricing strategies are more arbitrary than deliberate and are often decoupled from the services provided to specific client segments. Wealth managers simply cannot afford to overlook the importance of pricing and the need to adapt their pricing strategies and practices to the new realities of wealth management. Smarter pricing models and a more contained approach to discounting will become increasingly critical.”
Outlook
Tjun Tang, another BCG partner who worked on the report, said that the firm expects global wealth to grow at a compound annual rate of 5.9 percent from year-end 2010 through 2015—to about $162 trillion—driven by the performance of the capital markets and the growth of GDP in countries around the world. Wealth will grow fastest in emerging markets. In India and China, for example, it is expected to increase at a compound annual rate of 18 percent and 14 percent, respectively. As a result, the Asia-Pacific region’s share of global wealth (ex Japan) is projected to rise from 18 percent in 2010 to 23 percent in 2015.
In Japan, the amount of wealth is expected to decrease slightly in 2011 and then grow slowly for several years. The impact of the recent disaster on private wealth is still unclear, but it could put further stress on the growth of AuM in Japan.
“As much as the sustained recovery of global wealth reaffirms wealth management’s place as a relatively stable and attractive part of the financial services world,” Tang said, “it also masks important and lasting changes to the dynamics of this industry. Perhaps more than ever, a wealth manager’s adaptability—its capacity to anticipate and respond to a combination of regulatory, client-driven, and competitive changes—will determine how well it prospers from the continued growth of wealth.”
To request a copy of the report, please email Global.Wealth@bcg.com. For media inquiries or to arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.
1 -- Global wealth is defined as total assets under management (AuM) across all households. AuM includes cash deposits, money market funds, listed securities held directly or indirectly through managed investments, and onshore and offshore assets. It excludes wealth attributed to investors’ own businesses, residences, or luxury goods. Unless stated otherwise, AuM figures and percentage changes are based on local AuM totals that were converted to U.S. dollars using a constant year-end 2010 exchange rate for all years. This approach excludes the effects of fluctuating exchange rates.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries.
Findings from the study appear in BCG’s eleventh annual Global Wealth report titled Shaping a New Tomorrow: How to Capitalize on the Momentum of Change, which was released today at a press briefing in New York. Among the other key findings:
- North America had the largest absolute gain of any regional wealth market in assets under management (AuM), at $3.6 trillion, and the second-highest growth rate, at 10.2 percent. Its $38.2 trillion in AuM made it the world’s richest region, with nearly one-third of global wealth.
- In Europe, wealth grew at a below-average rate of 4.8 percent, but the region still had a gain of $1.7 trillion in AuM.
- Wealth grew fastest in Asia-Pacific (excluding Japan), at a 17.1 percent rate. In the Middle East and Africa, growth was somewhat above the global average, at 8.6 percent. In Latin America, wealth grew by 8.2 percent. Together, these three regions accounted for 24.4 percent of global wealth in 2010, up from 20.9 percent in 2008.
- Wealth declined by 0.2 percent in the Japanese market to $16.8 trillion. As recently as 2008, Japan accounted for more than half of all the wealth in Asia-Pacific. In 2010, it accounted for about 44 percent.
- In terms of individual countries, the nations showing the largest absolute gains in wealth were the United States, China, the United Kingdom, and India.
The strong performance of the financial markets accounted for the lion’s share (59 percent) of the growth in AuM. Its impact was amplified by the ongoing reallocation of wealth. From year-end 2008 through 2010, the share of wealth held in equities increased from 29 percent to 35 percent. “During the crisis, cash was king,” said Monish Kumar, a BCG senior partner and a coauthor of the report. “Since then, clients have been steering their assets back into riskier investments.” North America continued to have the highest proportion of wealth held in equities—44 percent, up from 41 percent in 2009.
“The wealth management industry has overcome tremendous adversity over the past several years, and the sustained recovery of global wealth bodes well for its future,” added Kumar, who is the global leader of asset and wealth management at BCG. “But the positive signs should not be misread as a return to normal. A number of disruptive forces, including increased regulatory oversight and changes in client behavior, are rewriting the rules of the game—both literally and figuratively.”
Millionaire Households Grow in Number and Wealth
Millionaire households represented just 0.9 percent of all households but owned 39 percent of global wealth, up from 37 percent in 2009. The number of millionaire households increased by 12.2 percent in 2010 to about 12.5 million.
- The United States had by far the most millionaire households (5.2 million), followed by Japan, China, the United Kingdom, and Germany.
- Singapore continued to have the highest concentration of millionaire households, with 15.5 percent of all households having at least $1 million in AuM. Switzerland had the highest concentration of millionaire households in Europe and the second-highest overall, at 9.9 percent.
- Three of the six densest millionaire populations were in the Middle East—in Qatar, Kuwait, and the United Arab Emirates.
- The proportion of wealth owned by millionaire households increased the most in Asia-Pacific, at 2.9 percentage points, followed by North America, at 1.3 percentage points.
- The country with the fastest-growing number of millionaire households was Singapore, with 170,000—up nearly a third from 2009.
This year, for the first time, BCG published figures on the countries with the highest number of “ultra-high-net-worth” (UHNW) households, defined as those with more than $100 million in AuM. The United States had the largest number of these super-wealthy households (2,692), while Saudi Arabia had the highest concentration of UHNW households, measured per 100,000 households, at 18, followed by Switzerland (10), Hong Kong (9), Kuwait (8), and Austria (8). China experienced the fastest growth in the number of super-wealthy households, which jumped by more than 30 percent to 393.
Pressures Continue to Mount for Offshore Private Banks
The amount of offshore wealth—defined as assets booked in a country where the investor has no legal residence or tax domicile—increased to $7.8 trillion in 2010, up from $7.5 trillion in 2009. At the same time, however, the percentage of wealth held offshore slipped to 6.4 percent, down from 6.6 percent in 2009. The decline was the result of strong asset growth in countries where offshore wealth is less prominent, such as China, as well as stricter regulations in Europe and North America, which prompted clients to move their wealth back onshore.
“Offshore private banking remains a tumultuous part of the business,” said Anna Zakrzewski, a BCG principal and a coauthor of the report. “The relative importance of offshore centers is changing rapidly. Some are benefiting from continued asset growth, while others are suffering large asset outflows, with wealth being repatriated to onshore banks, transferred to other offshore centers, redirected into nonfinancial investments, or simply spent at a faster rate.”
For most clients, however, the core value proposition of offshore banking remains, Zakrzewski said. “Offshore wealth managers offer a sense of stability and security that these clients cannot find in their home countries. Other clients value the expertise or access to certain investments provided by offshore private banks. To continue to grow, offshore wealth managers will need to adapt to the changes imposed by the push for greater transparency while accentuating their strengths in areas that remain extremely relevant to clients around the world.”
Mixed Results for Wealth Managers
To gauge the performance of wealth managers (both private banks and wealth management units of large universal-banking groups), BCG gathered benchmarking data from 120 wealth-management institutions worldwide. The survey revealed wide variations in margins, cost ratios, and AuM growth across and within regions. On the whole, the industry experienced mixed results. The average pretax profit margin of wealth managers increased by 4 basis points to 23 basis points in 2010. In most regions, however, revenue margins remained lower than they were before the crisis (and in some places continued to decline), while cost-to-income ratios remained higher (and in some places continued to rise).
“In some markets, changes in regulations and client behavior have had a profound impact on wealth managers,” said Peter Damisch, a BCG partner and a coauthor of the report. “Especially in parts of Europe, clients are becoming more price sensitive, demanding more price transparency, and still avoiding higher-margin products.”
He continued, “For most wealth managers, pricing remains a vastly underutilized tool for improving revenue margins. At many wealth-management institutions, pricing strategies are more arbitrary than deliberate and are often decoupled from the services provided to specific client segments. Wealth managers simply cannot afford to overlook the importance of pricing and the need to adapt their pricing strategies and practices to the new realities of wealth management. Smarter pricing models and a more contained approach to discounting will become increasingly critical.”
Outlook
Tjun Tang, another BCG partner who worked on the report, said that the firm expects global wealth to grow at a compound annual rate of 5.9 percent from year-end 2010 through 2015—to about $162 trillion—driven by the performance of the capital markets and the growth of GDP in countries around the world. Wealth will grow fastest in emerging markets. In India and China, for example, it is expected to increase at a compound annual rate of 18 percent and 14 percent, respectively. As a result, the Asia-Pacific region’s share of global wealth (ex Japan) is projected to rise from 18 percent in 2010 to 23 percent in 2015.
In Japan, the amount of wealth is expected to decrease slightly in 2011 and then grow slowly for several years. The impact of the recent disaster on private wealth is still unclear, but it could put further stress on the growth of AuM in Japan.
“As much as the sustained recovery of global wealth reaffirms wealth management’s place as a relatively stable and attractive part of the financial services world,” Tang said, “it also masks important and lasting changes to the dynamics of this industry. Perhaps more than ever, a wealth manager’s adaptability—its capacity to anticipate and respond to a combination of regulatory, client-driven, and competitive changes—will determine how well it prospers from the continued growth of wealth.”
To request a copy of the report, please email Global.Wealth@bcg.com. For media inquiries or to arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.
1 -- Global wealth is defined as total assets under management (AuM) across all households. AuM includes cash deposits, money market funds, listed securities held directly or indirectly through managed investments, and onshore and offshore assets. It excludes wealth attributed to investors’ own businesses, residences, or luxury goods. Unless stated otherwise, AuM figures and percentage changes are based on local AuM totals that were converted to U.S. dollars using a constant year-end 2010 exchange rate for all years. This approach excludes the effects of fluctuating exchange rates.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 74 offices in 42 countries.
Thursday, March 24, 2011
The Boston Consulting Group Wins National Award for Innovative Career-Development Initiative
In recognition of one of its progressive career development and retention initiatives, The Boston Consulting Group (BCG) has received The Human Rights Campaign's 2011 Award for Workplace Equality Innovation.
HRC -- the largest U.S. civil-rights organization for lesbian, gay, bisexual, and transgender (LGBT) employees -- selected BCG because of the success of its "People Development Initiative," a program of training, development support, and mentorship for LGBT employees. The initiative seeks to advance two key business goals for the firm:
"What makes BCG's initiative so innovative and unique is the degree to which it takes a holistic approach to career development and affiliation," said Daryl Herrschaft, director of the HRC's Workplace Project, which administers the award. "We applaud BCG for developing such a forward-thinking program that enhances LGBT workplace inclusion."
As part of the People Development Initiative, BCG's LGBT Network holds regular workshops led by senior management to address the development needs of its members. Network leaders are assigned mentees to facilitate regularly scheduled and tailored discussions and performance reviews. Peer-to-peer learning is encouraged through the use of a detailed "experience database" that identifies LGBT employees with relevant expertise. All of this support supplements the firm's standard career-development activities and aims to increase the likelihood of promotion among LGBT employees.
In addition, the network ensures affiliation by hosting formal and informal local, regional, and global meetings; by providing recognition of accomplishments; by keeping the group connected (for example, through an intranet and online newsletters), and by creating a role for all of its members to help build and strengthen the network.
The program's impact to date has been impressive: The LGBT Network grew at a double- digit rate in 2009 and 2010 and retained more than 90 percent of its members. Well over one-quarter of its members have received a promotion since 2009, including strong gains made in middle-management roles last year. Members report that the network is a highly valued asset because of the affiliation and career development it provides.
"While other firms leverage LGBT groups to provide mentorship, the People Development Initiative is about much more than that," said Tom Wurster, a San Francisco-based senior partner who coleads BCG's LGBT Network. "It's about helping our LGBT employees thrive personally and professionally through holistic support. We think it can offer valuable lessons for other companies."
Indeed, BCG recently worked with a consumer goods company to help launch a similar initiative. "The company reported that the most valuable resources we provided were our guiding principles, activity list, and timeline of interactions," said Wurster. "These enabled the company to customize our original approach to accommodate its organizational needs."
BCG is the first consulting firm to receive the Workplace Equality Innovation Award since the honor was first presented in 2009. An external panel of judges selects two recipients each year. This year's winners, BCG and Goldman Sachs, will be honored at an awards ceremony March 23 at the Time Warner Center in Manhattan.
Rich Lesser, BCG's Chairman of North and South America, said, "We are thrilled to receive this honor. We believe strongly that diversity in all its forms creates stronger, more dynamic teams and provides unique perspectives and opportunities for both clients and staff."
The Workplace Equality Award is the latest in a series of recognitions that BCG has received for its progressive programs and policies. Last year, the firm earned a perfect score on the HRC Foundation's Corporate Equality Index for the fourth year in a row. And this year, BCG ranked second on Fortune's 100 Best Companies to Work For list, making the firm one of only two companies to place within the top dozen for six consecutive years.
In January, BCG became one of the first consultancies to offer LGBT employees reimbursement for federal taxes levied on health benefits for same-sex domestic partners. The policy took effect January 1, 2011.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 71 offices in 41 countries. For more information, visit www.bcg.com.
HRC -- the largest U.S. civil-rights organization for lesbian, gay, bisexual, and transgender (LGBT) employees -- selected BCG because of the success of its "People Development Initiative," a program of training, development support, and mentorship for LGBT employees. The initiative seeks to advance two key business goals for the firm:
- Enhance employees' capabilities within an environment that allows every individual to be his or her true self
- Ensure that BCG retains top talent who bring diverse perspectives to complex business problems
"What makes BCG's initiative so innovative and unique is the degree to which it takes a holistic approach to career development and affiliation," said Daryl Herrschaft, director of the HRC's Workplace Project, which administers the award. "We applaud BCG for developing such a forward-thinking program that enhances LGBT workplace inclusion."
As part of the People Development Initiative, BCG's LGBT Network holds regular workshops led by senior management to address the development needs of its members. Network leaders are assigned mentees to facilitate regularly scheduled and tailored discussions and performance reviews. Peer-to-peer learning is encouraged through the use of a detailed "experience database" that identifies LGBT employees with relevant expertise. All of this support supplements the firm's standard career-development activities and aims to increase the likelihood of promotion among LGBT employees.
In addition, the network ensures affiliation by hosting formal and informal local, regional, and global meetings; by providing recognition of accomplishments; by keeping the group connected (for example, through an intranet and online newsletters), and by creating a role for all of its members to help build and strengthen the network.
The program's impact to date has been impressive: The LGBT Network grew at a double- digit rate in 2009 and 2010 and retained more than 90 percent of its members. Well over one-quarter of its members have received a promotion since 2009, including strong gains made in middle-management roles last year. Members report that the network is a highly valued asset because of the affiliation and career development it provides.
"While other firms leverage LGBT groups to provide mentorship, the People Development Initiative is about much more than that," said Tom Wurster, a San Francisco-based senior partner who coleads BCG's LGBT Network. "It's about helping our LGBT employees thrive personally and professionally through holistic support. We think it can offer valuable lessons for other companies."
Indeed, BCG recently worked with a consumer goods company to help launch a similar initiative. "The company reported that the most valuable resources we provided were our guiding principles, activity list, and timeline of interactions," said Wurster. "These enabled the company to customize our original approach to accommodate its organizational needs."
BCG is the first consulting firm to receive the Workplace Equality Innovation Award since the honor was first presented in 2009. An external panel of judges selects two recipients each year. This year's winners, BCG and Goldman Sachs, will be honored at an awards ceremony March 23 at the Time Warner Center in Manhattan.
Rich Lesser, BCG's Chairman of North and South America, said, "We are thrilled to receive this honor. We believe strongly that diversity in all its forms creates stronger, more dynamic teams and provides unique perspectives and opportunities for both clients and staff."
The Workplace Equality Award is the latest in a series of recognitions that BCG has received for its progressive programs and policies. Last year, the firm earned a perfect score on the HRC Foundation's Corporate Equality Index for the fourth year in a row. And this year, BCG ranked second on Fortune's 100 Best Companies to Work For list, making the firm one of only two companies to place within the top dozen for six consecutive years.
In January, BCG became one of the first consultancies to offer LGBT employees reimbursement for federal taxes levied on health benefits for same-sex domestic partners. The policy took effect January 1, 2011.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 71 offices in 41 countries. For more information, visit www.bcg.com.
Thursday, November 4, 2010
The Boston Consulting Group's Sandy Moose to Receive Lifetime Achievement Award from Consulting Magazine
Sandra O. Moose, a Boston Consulting Group senior advisor who joined the firm more than 40 years ago as its first female consultant, has been named recipient of Consulting magazine's 2010 Lifetime Achievement Award -- part of its fourth annual Women Leaders in Consulting awards.
The award, which will be given at a gala dinner on November 11 at the Waldorf=Astoria in New York, is the latest in a series of honors that BCG women have received from Consulting, the industry's leading trade magazine.
Dr. Moose, a longtime Boston-area resident, is believed to be one of the first female management consultants and one of the first to rise to the profession's top ranks at a major firm. BCG founder Bruce Henderson hired her in 1968, five years after the firm's founding. She became a director (officer) in 1975 and a senior vice president in 1989, serving in that role until her retirement in late 2003.
Over the course of her long career with BCG, Moose has consulted to CEOs and top management teams in a broad range of industries -- particularly financial services, telephony, and consumer goods -- advising them on an array of strategic, organizational, and financial issues. She was a principal founder of the firm's Financial Services practice and a key contributor in the development of BCG's early management concepts.
As SVP, she held numerous leadership roles within the firm. She led the New York office from 1988 to 1998 and served as chair of the East Coast region from 1994 to 1998. She also chaired or served on several firm-wide committees, including the executive committee, the officer compensation committee, and the audit committee. In addition, she is credited with founding and later leading BCG's global Women's Initiative.
"Sandy Moose's contribution to BCG, its clients, and its people has been enormous," said BCG's president and CEO Hans-Paul Bürkner. "She played an integral role in building BCG as a business, leading major client relationships that took us into global strategy and large-scale implementation. She also greatly increased the number of women and minority consultants and partners. Through her pioneering example, she made it clear that women could not only hold their own, but be strong leaders within BCG and with the highest-level executives at our client companies."
Rich Lesser, a protégé of Moose's who eventually succeeded her as head of the New York office and is now chairman of North and South America, added, "I can think of no one more deserving of this recognition. Sandy was not only a great consultant but a true role model and mentor to so many of today's leaders in BCG."
Moose is the latest in a series of BCG women who have been honored by Consulting for their leadership and impact. At the first annual Women Leaders in Consulting awards event in 2007, Sharon Marcil won the magazine's inaugural Client Service Award. The next year, Jeanie Duck won its Lifetime Achievement Award. They and fellow senior partners Miki Tsusaka and Antonella Mei-Pochtler have also been named to Consulting's annual Top 25 Consultants list.
Moose is currently president of her own firm, Strategic Advisory Services, and serves on a number of corporate and nonprofit boards. She is presiding director of Verizon Communications, a director of The AES Corporation, and chairman of Natixis Funds and Loomis Sayles Funds. She also serves on the boards of the Alfred P. Sloan Foundation, a philanthropic grant-making institution, and the Boston Public Library Foundation. Other charitable organizations of which she is a director or trustee include the Museum of Fine Arts in Boston (president-elect), the Boston Symphony Orchestra, and the Museum of Science.
Previously, she was a trustee of Hampshire College (1976-1983) and Wheaton College (1981-1991) and chair of the Council of the Harvard Graduate Society (2005-2009). She served as lead director of Rohm and Haas from 1999 to 2009, when the company was sold to Dow Chemical.
In 1999, Moose received the American Economic Association's Carolyn Shaw Bell Award, presented annually to an individual who has furthered the status of women in the economics profession. For her contributions on boards, she was given the Outstanding Corporate Director of the Year Award in 2004 from the Outstanding Directors Exchange (ODX) and the Leadership in Public Corporate Governance Award in 2008 from the National Association of Corporate Directors New England Chapter.
Dr. Moose received her PhD and MA in economics from Harvard University and her BA in economics summa cum laude from Wheaton College (MA), where she was a member of Phi Beta Kappa and a Woodrow Wilson Fellow. She received an honorary Doctor of Letters degree from Wheaton College in 2009 and was elected a trustee emerita.
To arrange an interview with Dr. Moose, please contact Dave Fondiller at 212 446 3257 or fondiller.david@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 70 offices in 41 countries. For more information, please visit www.bcg.com.
The award, which will be given at a gala dinner on November 11 at the Waldorf=Astoria in New York, is the latest in a series of honors that BCG women have received from Consulting, the industry's leading trade magazine.
Dr. Moose, a longtime Boston-area resident, is believed to be one of the first female management consultants and one of the first to rise to the profession's top ranks at a major firm. BCG founder Bruce Henderson hired her in 1968, five years after the firm's founding. She became a director (officer) in 1975 and a senior vice president in 1989, serving in that role until her retirement in late 2003.
Over the course of her long career with BCG, Moose has consulted to CEOs and top management teams in a broad range of industries -- particularly financial services, telephony, and consumer goods -- advising them on an array of strategic, organizational, and financial issues. She was a principal founder of the firm's Financial Services practice and a key contributor in the development of BCG's early management concepts.
As SVP, she held numerous leadership roles within the firm. She led the New York office from 1988 to 1998 and served as chair of the East Coast region from 1994 to 1998. She also chaired or served on several firm-wide committees, including the executive committee, the officer compensation committee, and the audit committee. In addition, she is credited with founding and later leading BCG's global Women's Initiative.
"Sandy Moose's contribution to BCG, its clients, and its people has been enormous," said BCG's president and CEO Hans-Paul Bürkner. "She played an integral role in building BCG as a business, leading major client relationships that took us into global strategy and large-scale implementation. She also greatly increased the number of women and minority consultants and partners. Through her pioneering example, she made it clear that women could not only hold their own, but be strong leaders within BCG and with the highest-level executives at our client companies."
Rich Lesser, a protégé of Moose's who eventually succeeded her as head of the New York office and is now chairman of North and South America, added, "I can think of no one more deserving of this recognition. Sandy was not only a great consultant but a true role model and mentor to so many of today's leaders in BCG."
Moose is the latest in a series of BCG women who have been honored by Consulting for their leadership and impact. At the first annual Women Leaders in Consulting awards event in 2007, Sharon Marcil won the magazine's inaugural Client Service Award. The next year, Jeanie Duck won its Lifetime Achievement Award. They and fellow senior partners Miki Tsusaka and Antonella Mei-Pochtler have also been named to Consulting's annual Top 25 Consultants list.
Moose is currently president of her own firm, Strategic Advisory Services, and serves on a number of corporate and nonprofit boards. She is presiding director of Verizon Communications, a director of The AES Corporation, and chairman of Natixis Funds and Loomis Sayles Funds. She also serves on the boards of the Alfred P. Sloan Foundation, a philanthropic grant-making institution, and the Boston Public Library Foundation. Other charitable organizations of which she is a director or trustee include the Museum of Fine Arts in Boston (president-elect), the Boston Symphony Orchestra, and the Museum of Science.
Previously, she was a trustee of Hampshire College (1976-1983) and Wheaton College (1981-1991) and chair of the Council of the Harvard Graduate Society (2005-2009). She served as lead director of Rohm and Haas from 1999 to 2009, when the company was sold to Dow Chemical.
In 1999, Moose received the American Economic Association's Carolyn Shaw Bell Award, presented annually to an individual who has furthered the status of women in the economics profession. For her contributions on boards, she was given the Outstanding Corporate Director of the Year Award in 2004 from the Outstanding Directors Exchange (ODX) and the Leadership in Public Corporate Governance Award in 2008 from the National Association of Corporate Directors New England Chapter.
Dr. Moose received her PhD and MA in economics from Harvard University and her BA in economics summa cum laude from Wheaton College (MA), where she was a member of Phi Beta Kappa and a Woodrow Wilson Fellow. She received an honorary Doctor of Letters degree from Wheaton College in 2009 and was elected a trustee emerita.
To arrange an interview with Dr. Moose, please contact Dave Fondiller at 212 446 3257 or fondiller.david@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 70 offices in 41 countries. For more information, please visit www.bcg.com.
Wednesday, June 2, 2010
Boston Consulting Group: Forty Fast-Growing and Globalizing Companies Highlight Africa's Economic Awakening
Forty African companies, the "African challengers," have been rapidly expanding , competing in the global economy, and highlighting the vitality of a continent whose economic accomplishments rarely receive attention, according to a report published today by The Boston Consulting Group (BCG).
The 40 African challengers range in size from $350 million to $80 billion in annual sales and represent most of the major industry sectors. They all display strong growth, an international footprint, and ambitious plans to further expand overseas. Most of the companies are based in South Africa (with 18 companies), Egypt (with 7), and Morocco (with 6). The nine remaining players come from Algeria, Angola, Nigeria, Togo, and Tunisia. These eight countries represent 70 percent of Africa's GDP, according to "The African Challengers: Global Competitors Emerge from the Overlooked Continent."
There are, of course, many more than 40 noteworthy African companies. The list focuses on those with global ambitions. Since 2003, export growth has expanded by 24 percent annually among these 40 companies. These companies have also significantly increased their level of cross-border mergers and acquisitions.
International expansion has helped the African challengers grow more swiftly than established players in developed markets. Between 2003 and 2008, the annual revenues of the group rose by 24 percent, compared with 11 percent for S&P 500 companies, 9 percent for Nikkei 225 companies, and 10 percent for DAX 30 companies.
The African challengers are also more profitable, with an average operating margin of 20 percent, compared with 15 percent for the S&P 500 and 10 percent for both the Nikkei 225 and the DAX 30. A $100 investment in November 2000 in a hypothetical African challengers index would have grown by 25 percent per year and have been worth more than $900 in November 2009, compared with $303 for a similar investment in the MSCI Emerging Market index and $92 for an S&P 500 investment.
While the challenges of Africa are well known, the strength of the African economy is frequently underestimated. The African Challengers aims to set the record straight. "The African economy is much more vibrant and entrepreneurial than most casual observers understand," says Patrick Dupoux, a partner and managing director in BCG's Casablanca office.
Several countries -- the African Lions -- are outperforming and growing at similar rates to the so-called BRIC nations of Brazil, Russia, India, and China. The African Lions consist of Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, South Africa, and Tunisia. Their GDP per capita in 2008 was $10,000 compared with $8,800 for the BRIC nations. All but five of the African challengers come from these nations. "Few people recognize that a new breed of African companies is poised to make a big splash on the global stage," Dupoux observes. "These companies are following the same path as the global challengers from the BRIC nations."
While the Great Recession shrank most economies, Africa was able to grow. In 2009, the continent's GDP expanded by 2 percent, while GDP dropped 4 percent in the United States, 2.8 percent in the European Union, and 1.5 percent in Latin America.
"While the 40 African challengers have grown very fast in recent years, only a few of them can already be considered truly global. We are confident that they can reach this next frontier if they achieve excellence in operations, broaden their footprint through selected cross-border acquisitions, build a global workforce, and acquire global brands," says Dupoux.
Methodology for Selecting the 2010 African Challengers
To compile the list of 40 African challengers, BCG examined almost 600 companies covering all economic sectors. As a first cut, companies had to meet the following minimum threshold: $300 million in annual revenues for banks and $500 million in annual revenues for all other companies. In addition, companies with less than $1 billion in sales had to show double-digit revenue growth over the past five years. Subsidiaries that had never been freestanding indigenous companies were excluded.
About 70 companies met these requirements and were examined on the basis of: revenue; one-, five-, and ten-year growth rates; cash flow; leverage ratio; and level of globalization as defined by exports, foreign-based employees, foreign assets, and foreign acquisitions and partnerships. The companies chosen as challengers were those with the most dynamic international presence. When there were two strong companies from the same country within a single sector, only the leader was selected, in order to increase the list's diversity.
To order a copy of "The African Challengers: Global Competitors Emerge from the Overlooked Continent," go to http://www.bcg.com/expertise_impact/PublicationDetails.aspx?id=tcm:12-44612.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 69 offices in 40 countries. For more information, please visit www.bcg.com.
The 40 African challengers range in size from $350 million to $80 billion in annual sales and represent most of the major industry sectors. They all display strong growth, an international footprint, and ambitious plans to further expand overseas. Most of the companies are based in South Africa (with 18 companies), Egypt (with 7), and Morocco (with 6). The nine remaining players come from Algeria, Angola, Nigeria, Togo, and Tunisia. These eight countries represent 70 percent of Africa's GDP, according to "The African Challengers: Global Competitors Emerge from the Overlooked Continent."
There are, of course, many more than 40 noteworthy African companies. The list focuses on those with global ambitions. Since 2003, export growth has expanded by 24 percent annually among these 40 companies. These companies have also significantly increased their level of cross-border mergers and acquisitions.
International expansion has helped the African challengers grow more swiftly than established players in developed markets. Between 2003 and 2008, the annual revenues of the group rose by 24 percent, compared with 11 percent for S&P 500 companies, 9 percent for Nikkei 225 companies, and 10 percent for DAX 30 companies.
The African challengers are also more profitable, with an average operating margin of 20 percent, compared with 15 percent for the S&P 500 and 10 percent for both the Nikkei 225 and the DAX 30. A $100 investment in November 2000 in a hypothetical African challengers index would have grown by 25 percent per year and have been worth more than $900 in November 2009, compared with $303 for a similar investment in the MSCI Emerging Market index and $92 for an S&P 500 investment.
While the challenges of Africa are well known, the strength of the African economy is frequently underestimated. The African Challengers aims to set the record straight. "The African economy is much more vibrant and entrepreneurial than most casual observers understand," says Patrick Dupoux, a partner and managing director in BCG's Casablanca office.
Several countries -- the African Lions -- are outperforming and growing at similar rates to the so-called BRIC nations of Brazil, Russia, India, and China. The African Lions consist of Algeria, Botswana, Egypt, Libya, Mauritius, Morocco, South Africa, and Tunisia. Their GDP per capita in 2008 was $10,000 compared with $8,800 for the BRIC nations. All but five of the African challengers come from these nations. "Few people recognize that a new breed of African companies is poised to make a big splash on the global stage," Dupoux observes. "These companies are following the same path as the global challengers from the BRIC nations."
While the Great Recession shrank most economies, Africa was able to grow. In 2009, the continent's GDP expanded by 2 percent, while GDP dropped 4 percent in the United States, 2.8 percent in the European Union, and 1.5 percent in Latin America.
"While the 40 African challengers have grown very fast in recent years, only a few of them can already be considered truly global. We are confident that they can reach this next frontier if they achieve excellence in operations, broaden their footprint through selected cross-border acquisitions, build a global workforce, and acquire global brands," says Dupoux.
Methodology for Selecting the 2010 African Challengers
To compile the list of 40 African challengers, BCG examined almost 600 companies covering all economic sectors. As a first cut, companies had to meet the following minimum threshold: $300 million in annual revenues for banks and $500 million in annual revenues for all other companies. In addition, companies with less than $1 billion in sales had to show double-digit revenue growth over the past five years. Subsidiaries that had never been freestanding indigenous companies were excluded.
About 70 companies met these requirements and were examined on the basis of: revenue; one-, five-, and ten-year growth rates; cash flow; leverage ratio; and level of globalization as defined by exports, foreign-based employees, foreign assets, and foreign acquisitions and partnerships. The companies chosen as challengers were those with the most dynamic international presence. When there were two strong companies from the same country within a single sector, only the leader was selected, in order to increase the list's diversity.
To order a copy of "The African Challengers: Global Competitors Emerge from the Overlooked Continent," go to http://www.bcg.com/expertise_impact/PublicationDetails.aspx?id=tcm:12-44612.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 69 offices in 40 countries. For more information, please visit www.bcg.com.
Wednesday, May 26, 2010
Google, McKinsey & Company and Goldman Sachs take the Top 3 spots among MBA Students in the United States
Universum – Americas, announced today the results of its annual MBA employer image survey, also known as the IDEAL Employer Survey.
Based on the frequency of being selected as an IDEAL employer, Universum produces an IDEAL employer ranking, dubbed the Universum Top 100. The rankings reflect the level of employer attractiveness that companies or organizations have on the recruitment market, and consequently the strength of their employer brands.
Google takes the first position for the fourth year in a row as Bain & Company drops to number 6 from number 3 in 2009, Goldman Sachs moves up to number 3, followed by The Boston Consulting Group, who also increases in the rankings. In turn, 3 investment banks made the top 15 IDEAL Employer’s among MBA students nationwide.
"Being a part of the rebuilding of the investment banking industry is really appealing," said Camille Kelly, Vice President of Employer Branding at Universum. "The opportunity to work at a company when it's on the road to recovery is a great chance to make an impact at your first job out of school."
The Top 20 IDEAL Employers: 2010 vs. 2009
Top 20 [2010]:
1.Google
2.McKinsey & Company
3.Goldman Sachs
4.The Boston Consulting Group
5.Apple Computer
6.Bain & Company
7.J.P. Morgan
8.Walt Disney Company
9.Nike
10.Johnson & Johnson,
11. Amazon, 12.Deloitte, 13.The Blackstone Group, 14.Morgan Stanley, 15.Microsoft, 16.General Electric, 17.Procter & Gamble, 18.IDEO,19.The Coca-Cola Company, 20.Credit Suisse
Top 20 [2009]:
1.Google
2.McKinsey & Company
3.Bain & Company
4.Goldman Sachs
5.Apple Computer
6.The Boston Consulting Group
7.Walt Disney Company
8.Nike
9.J.P. Morgan
10.Johnson & Johnson
11.The Blackstone Group, 12.Microsoft, 13.General Electric, 14.Morgan Stanley, 15.IDEO, 16.Deloitte, 17.Procter & Gamble, 18.Amazon,19.The Coca-Cola Company, 20.Pepsi Co
To view the Universum Top 100, go to http://www.universumglobal.com/US-MBA-Rankings
About the Universum Top 100 IDEAL Employer Rankings – US MBA Edition
The results are based on the answers of 5,732 students, studying to receive their MBA, and 21,561 number of individual employer evaluations from 50 schools nationwide. Each respondent is presented with a list of 290 national and international employers, nominated by the target group through an independent and structured nomination and assessment process, which prevents companies unfairly influencing their position. Respondents acknowledge those companies they would consider working for. Of the companies selected as ‘considered employers’, the respondents then select their five ‘Ideal Employers’. The rankings, dubbed the Universum Top 100, measure the level of employer attractiveness of companies or organization on the recruitment market.
About Universum
Universum is an international company which specializes in the field of employer branding*. Founded in 1988, its goal was to improve communication between students and the employers who want to recruit them. Today, Universum’s mission is to help employers excel in recruitment and retention by ensuring improvements to their employer brand. Universum delivers a full range of services in research, strategic consulting and communication solutions that enable employers to better understand, attract and retain current and future ideal employees. Universum is a trusted partner to 1,200 clients, including many Fortune 500 companies, and co-operates with 1,500 universities worldwide to conduct research on the career and employer preferences of top talent. Last year, Universum surveyed 300,000 students and 80,000 professionals worldwide. For more information, go to www.universumglobal.com
*Employer branding is the strategy companies use to appeal to desired current and future ideal talent.
Based on the frequency of being selected as an IDEAL employer, Universum produces an IDEAL employer ranking, dubbed the Universum Top 100. The rankings reflect the level of employer attractiveness that companies or organizations have on the recruitment market, and consequently the strength of their employer brands.
Google takes the first position for the fourth year in a row as Bain & Company drops to number 6 from number 3 in 2009, Goldman Sachs moves up to number 3, followed by The Boston Consulting Group, who also increases in the rankings. In turn, 3 investment banks made the top 15 IDEAL Employer’s among MBA students nationwide.
"Being a part of the rebuilding of the investment banking industry is really appealing," said Camille Kelly, Vice President of Employer Branding at Universum. "The opportunity to work at a company when it's on the road to recovery is a great chance to make an impact at your first job out of school."
The Top 20 IDEAL Employers: 2010 vs. 2009
Top 20 [2010]:
1.Google
2.McKinsey & Company
3.Goldman Sachs
4.The Boston Consulting Group
5.Apple Computer
6.Bain & Company
7.J.P. Morgan
8.Walt Disney Company
9.Nike
10.Johnson & Johnson,
11. Amazon, 12.Deloitte, 13.The Blackstone Group, 14.Morgan Stanley, 15.Microsoft, 16.General Electric, 17.Procter & Gamble, 18.IDEO,19.The Coca-Cola Company, 20.Credit Suisse
Top 20 [2009]:
1.Google
2.McKinsey & Company
3.Bain & Company
4.Goldman Sachs
5.Apple Computer
6.The Boston Consulting Group
7.Walt Disney Company
8.Nike
9.J.P. Morgan
10.Johnson & Johnson
11.The Blackstone Group, 12.Microsoft, 13.General Electric, 14.Morgan Stanley, 15.IDEO, 16.Deloitte, 17.Procter & Gamble, 18.Amazon,19.The Coca-Cola Company, 20.Pepsi Co
To view the Universum Top 100, go to http://www.universumglobal.com/US-MBA-Rankings
About the Universum Top 100 IDEAL Employer Rankings – US MBA Edition
The results are based on the answers of 5,732 students, studying to receive their MBA, and 21,561 number of individual employer evaluations from 50 schools nationwide. Each respondent is presented with a list of 290 national and international employers, nominated by the target group through an independent and structured nomination and assessment process, which prevents companies unfairly influencing their position. Respondents acknowledge those companies they would consider working for. Of the companies selected as ‘considered employers’, the respondents then select their five ‘Ideal Employers’. The rankings, dubbed the Universum Top 100, measure the level of employer attractiveness of companies or organization on the recruitment market.
About Universum
Universum is an international company which specializes in the field of employer branding*. Founded in 1988, its goal was to improve communication between students and the employers who want to recruit them. Today, Universum’s mission is to help employers excel in recruitment and retention by ensuring improvements to their employer brand. Universum delivers a full range of services in research, strategic consulting and communication solutions that enable employers to better understand, attract and retain current and future ideal employees. Universum is a trusted partner to 1,200 clients, including many Fortune 500 companies, and co-operates with 1,500 universities worldwide to conduct research on the career and employer preferences of top talent. Last year, Universum surveyed 300,000 students and 80,000 professionals worldwide. For more information, go to www.universumglobal.com
*Employer branding is the strategy companies use to appeal to desired current and future ideal talent.
Tuesday, October 13, 2009
Long-Term Sustainability of Performance Is the Key to Success in Postcrisis Capital Markets, Says Report by The Boston Consulting Group
Companies suffering a massive decline in stock market valuation in the wake of the global economic crisis should learn the lessons of an elite group of so-called sustainable value creators that have generated sizable and sustainable shareholder returns over a decade, according to a new report by The Boston Consulting Group (BCG).
In "Searching for Sustainability: Value Creation in an Era of Diminished Expectations," the eleventh annual report in its Value Creators series, BCG identifies 25 companies with a market capitalization of at least $30 billion that have consistently outperformed their local stock-market average during the 10 years from 1999 through 2008.
These include Apple, Samsung Electronics, Tesco, McDonald's, and Procter & Gamble, as well as several less-known but highly successful companies -- such as Gilead Sciences, a U.S. drug company, which is ranked in first place; Vale, the Brazilian commodities producer; Reliance Industries, the Indian chemicals giant; Teva, the Israeli generic-drug manufacturer; Novo Nordisk, a Danish pharmaceutical company; and German energy company E.ON, a leading player in European power and gas.
In addition to the 25 sustainable value creators, this year's report presents a detailed analysis of the shareholder returns of 694 companies across 14 major industries for the five-year period from 2004 through 2008. It identifies the top ten value creators worldwide and in each of the industries. Among the key findings:
-- The average annual total shareholder return (TSR) in this year's sample was an anemic 2.9 percent -- and in 5 of the 14 industry samples, the average TSR was actually negative. This poor performance reflects the precipitous decline in market values in late 2008 owing to the financial crisis.
-- The big industry winner in this year's rankings was the utilities sector, with an average annual TSR of 10.9 percent. Although sales growth in the sector was only average, utilities companies had the highest dividend yield of all industries -- 4 percent. When the impact of debt reductions and share repurchases in the sector is taken into account, distributions of free cash flow accounted for a full five percentage points of TSR -- nearly half the industry average.
-- What's more, utilities was the only sector to actually see multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA) grow, on average. Clearly, the sector's ability to generate and pay out cash played a major role in its success and perhaps even served to put a floor under industry valuation multiples at a time when in every other industry and in the sample as a whole, declines in EBITDA multiples destroyed TSR.
-- In every industry, the top ten companies not only substantially outperformed their own industry average but also beat the overall sample average -- by more than four percentage points of TSR.
"The lesson for executives is clear," said coauthor Frank Plaschke, a partner in BCG's Munich office. "Coming from a sector with below-average market performance is no excuse. No matter how bad an industry's average performance is relative to other sectors and to the market as a whole, it is still possible for companies in that industry to deliver superior shareholder returns."
Lessons from the Sustainable Value Creators
The main focus of this year's report, however, is on performance over an even longer time frame. The experience of the 25 sustainable value creators suggests four distinct pathways to long-term outperformance, each with its own preconditions, necessary management disciplines, and potential pitfalls:
-- Growth Engines that consistently deliver sales growth well above the GDP average -- usually 15 percent per year or more
-- Cash Machines that emphasize generating cash through margin improvement and the direct payment of free cash flow to shareholders in the form of dividends and share repurchases or to debt holders by paying down debt
-- Portfolio Migrators that systematically refashion the mix of their business portfolio over time through acquisitions and divestitures in order to move into businesses and markets with greater value-creation potential
-- Value Impresarios that use some combination of all these approaches, shifting their emphasis to the one that has the most potential to exceed investor expectations at any moment in time
"Choosing the right pathway must take into account a company's starting point in the capital markets, its competitive position, and the evolving dynamics of its industry," said coauthor Eric Olsen, a senior partner in BCG's Chicago office. "And over time, a company must be prepared to change its approach as its circumstances change."
The Continuing Relevance of Shareholder Value
At a time when precipitous declines in valuation and high volatility in stock prices have caused some senior executives to question the principle of managing for shareholder value, the report also makes a strong case that the concepts and tools of shareholder value management are more important today than ever.
"It is precisely in times of high uncertainty that companies have to make carefully targeted bets," said coauthor Daniel Stelter, a senior partner in BCG's Berlin office and global leader of the firm's Corporate Development practice. "Recessions typically accelerate the forces reshaping industries and create new winners and losers in the struggle for competitive advantage. In addition to being a critically important way of measuring company performance, value management sets an essential context for corporate decision making. It's the only way to assess and evaluate unlike businesses in the portfolio, weigh the potential tradeoffs and risks among different strategic moves, and in the end optimize total business performance."
"Searching for Sustainability" provides executives with a road map for sustainable outperformance at a time when more and more investors are on the lookout for companies with a long-term track record and a credible plan for delivering value not just this year or the next but for many years to come.
To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
In "Searching for Sustainability: Value Creation in an Era of Diminished Expectations," the eleventh annual report in its Value Creators series, BCG identifies 25 companies with a market capitalization of at least $30 billion that have consistently outperformed their local stock-market average during the 10 years from 1999 through 2008.
These include Apple, Samsung Electronics, Tesco, McDonald's, and Procter & Gamble, as well as several less-known but highly successful companies -- such as Gilead Sciences, a U.S. drug company, which is ranked in first place; Vale, the Brazilian commodities producer; Reliance Industries, the Indian chemicals giant; Teva, the Israeli generic-drug manufacturer; Novo Nordisk, a Danish pharmaceutical company; and German energy company E.ON, a leading player in European power and gas.
In addition to the 25 sustainable value creators, this year's report presents a detailed analysis of the shareholder returns of 694 companies across 14 major industries for the five-year period from 2004 through 2008. It identifies the top ten value creators worldwide and in each of the industries. Among the key findings:
-- The average annual total shareholder return (TSR) in this year's sample was an anemic 2.9 percent -- and in 5 of the 14 industry samples, the average TSR was actually negative. This poor performance reflects the precipitous decline in market values in late 2008 owing to the financial crisis.
-- The big industry winner in this year's rankings was the utilities sector, with an average annual TSR of 10.9 percent. Although sales growth in the sector was only average, utilities companies had the highest dividend yield of all industries -- 4 percent. When the impact of debt reductions and share repurchases in the sector is taken into account, distributions of free cash flow accounted for a full five percentage points of TSR -- nearly half the industry average.
-- What's more, utilities was the only sector to actually see multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA) grow, on average. Clearly, the sector's ability to generate and pay out cash played a major role in its success and perhaps even served to put a floor under industry valuation multiples at a time when in every other industry and in the sample as a whole, declines in EBITDA multiples destroyed TSR.
-- In every industry, the top ten companies not only substantially outperformed their own industry average but also beat the overall sample average -- by more than four percentage points of TSR.
"The lesson for executives is clear," said coauthor Frank Plaschke, a partner in BCG's Munich office. "Coming from a sector with below-average market performance is no excuse. No matter how bad an industry's average performance is relative to other sectors and to the market as a whole, it is still possible for companies in that industry to deliver superior shareholder returns."
Lessons from the Sustainable Value Creators
The main focus of this year's report, however, is on performance over an even longer time frame. The experience of the 25 sustainable value creators suggests four distinct pathways to long-term outperformance, each with its own preconditions, necessary management disciplines, and potential pitfalls:
-- Growth Engines that consistently deliver sales growth well above the GDP average -- usually 15 percent per year or more
-- Cash Machines that emphasize generating cash through margin improvement and the direct payment of free cash flow to shareholders in the form of dividends and share repurchases or to debt holders by paying down debt
-- Portfolio Migrators that systematically refashion the mix of their business portfolio over time through acquisitions and divestitures in order to move into businesses and markets with greater value-creation potential
-- Value Impresarios that use some combination of all these approaches, shifting their emphasis to the one that has the most potential to exceed investor expectations at any moment in time
"Choosing the right pathway must take into account a company's starting point in the capital markets, its competitive position, and the evolving dynamics of its industry," said coauthor Eric Olsen, a senior partner in BCG's Chicago office. "And over time, a company must be prepared to change its approach as its circumstances change."
The Continuing Relevance of Shareholder Value
At a time when precipitous declines in valuation and high volatility in stock prices have caused some senior executives to question the principle of managing for shareholder value, the report also makes a strong case that the concepts and tools of shareholder value management are more important today than ever.
"It is precisely in times of high uncertainty that companies have to make carefully targeted bets," said coauthor Daniel Stelter, a senior partner in BCG's Berlin office and global leader of the firm's Corporate Development practice. "Recessions typically accelerate the forces reshaping industries and create new winners and losers in the struggle for competitive advantage. In addition to being a critically important way of measuring company performance, value management sets an essential context for corporate decision making. It's the only way to assess and evaluate unlike businesses in the portfolio, weigh the potential tradeoffs and risks among different strategic moves, and in the end optimize total business performance."
"Searching for Sustainability" provides executives with a road map for sustainable outperformance at a time when more and more investors are on the lookout for companies with a long-term track record and a credible plan for delivering value not just this year or the next but for many years to come.
To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
Friday, October 2, 2009
Bain Takes Top Spot in Annual Consulting Magazine Best Firms to Work For Survey
Through good times and bad, Bain & Company continues to outpace the competition. For the seventh consecutive year, the firm took the top spot on Consulting magazine's annual Best Firms to Work For survey. The complete survey findings are published in the September/October issue of Consulting magazine.
"Bain's run is incredibly impressive, especially when you consider it began during the last downturn, ran through the good economic years, and now continues even into another recession," says Consulting magazine's Editor-in-Chief Joseph Kornik. "Clearly, Bain is doing something right."
Plenty right, according to Bain's own employees. On the survey, consultants were asked questions about everything from retention rates and morale at their firms to training and vacation policies. Firms on both lists were ranked on six categories: The Job, Compensation and Benefits, Work/Life Balance, Leadership, Career Development and Culture, and were ranked based on a cumulative total from all categories.
The 2009 Best Firms to Work For list includes (in alphabetical order): Accenture, AlixPartners, Alvarez & Marsal, A.T. Kearney, Bain & Company, Booz Allen Hamilton, Booz & Company, The Boston Consulting Group, Deloitte Consulting, McKinsey & Company, Milliman, North Highland, PricewaterhouseCoopers, Towers Perrin and ZS Associates. Meanwhile, The Best Small Firm to Work For was Impact Advisors, a healthcare IT firm based in Naperville, Ill.
In all, the Best Firms to Work For survey drew 10,000 responses representing 236 consulting firms. For full editorial coverage, visit www.consultingmag.com.
About Consulting magazine
Consulting magazine is the only magazine to cover decision-makers at the world's most influential consulting firms. Published six times a year by Kennedy Information, the magazine is available online at www.consultingmag.com. The magazine also sponsors a range of events throughout the year, which are often based on exclusive Best Firms to Work For data.
"Bain's run is incredibly impressive, especially when you consider it began during the last downturn, ran through the good economic years, and now continues even into another recession," says Consulting magazine's Editor-in-Chief Joseph Kornik. "Clearly, Bain is doing something right."
Plenty right, according to Bain's own employees. On the survey, consultants were asked questions about everything from retention rates and morale at their firms to training and vacation policies. Firms on both lists were ranked on six categories: The Job, Compensation and Benefits, Work/Life Balance, Leadership, Career Development and Culture, and were ranked based on a cumulative total from all categories.
The 2009 Best Firms to Work For list includes (in alphabetical order): Accenture, AlixPartners, Alvarez & Marsal, A.T. Kearney, Bain & Company, Booz Allen Hamilton, Booz & Company, The Boston Consulting Group, Deloitte Consulting, McKinsey & Company, Milliman, North Highland, PricewaterhouseCoopers, Towers Perrin and ZS Associates. Meanwhile, The Best Small Firm to Work For was Impact Advisors, a healthcare IT firm based in Naperville, Ill.
In all, the Best Firms to Work For survey drew 10,000 responses representing 236 consulting firms. For full editorial coverage, visit www.consultingmag.com.
About Consulting magazine
Consulting magazine is the only magazine to cover decision-makers at the world's most influential consulting firms. Published six times a year by Kennedy Information, the magazine is available online at www.consultingmag.com. The magazine also sponsors a range of events throughout the year, which are often based on exclusive Best Firms to Work For data.
Wednesday, September 23, 2009
Clients Demonstrate Preference for End-to-End IT Service Providers in the IT Strategy Consulting Marketplace
The downturn has driven clients seeking IT strategy and planning advice away from pure play strategy firms just at a time when they could use the business the most. New research from Kennedy Consulting Research & Advisory, "IT Strategy and Planning Consulting Marketplace," shows that client organizations are now turning more to firms with a broader array of services and the ability to take on comprehensive execution of IT strategy recommendations.
In response, many consultancies are entering into strategic alliances to position themselves as end-to-end providers of IT services, strategy, consulting, systems integration, and managed business services. For client companies that desire "one-stop shopping," firms with ITSP capabilities vary in size from fewer than 500 consultants at KSA, acquired by MCG in 2007 to more than 90,000 at CSC.
"Client demand has fueled much of this trend toward one-stop shopping as organizations seek accountability for the IT strategy delivered," said Leslie Ament, Associate Director of Research, Kennedy Consulting Research & Advisory. "Our research revealed that 60-70% of clients engage with firms that understand the global complications, implications and next steps in downstream execution of a comprehensive IT strategy."
This is in direct contrast to previous trends, in which customers wanted pure ITSP consulting advice from strategy firms such as Bain, BCG, Booz & Co. or McKinsey. Ament added, "Success will now come to those IT strategy and planning practices that change their delivery models, offer pricing alternatives, re-package services, and form strategic alliances with other vendors to increase services breadth on a global basis."
In "IT Strategy and Planning Consulting Marketplace," Kennedy assesses Accenture, Capgemini, CSC, Deloitte, Fujitsu, Hitachi, HP/EDS, IBM, KPMG, KSA, and PwC as firms capable of delivering comprehensive IT consulting services -- from strategic planning through execution. The research ranks leading multi-service, end-to-end, and strategy firms serving the IT strategy and planning consulting marketplace in "The Kennedy Vanguard of Strategy Firms: ITSP Capabilities" and "The Kennedy Vanguard of Multi-Service Firms: ITSP Capabilities," respectively.
Twenty-nine firms are evaluated in total, by both their breadth and depth of services, including: Accenture, Archstone Consulting, Atos Origin, Bain, BearingPoint, Booz Allen Hamilton, Booz & Co., The Boston Consulting Group, Capgemini, Cognizant, CSC, Deloitte, Diamond Management, Fujitsu, Hitachi, HP/EDS, IBM, IDS Scheer, Infosys, KPMG, KSA, McKinsey & Co., Oliver Wyman, PA Consulting, PwC, Roland Berger, Tata, Unisys, and Wipro.
About Kennedy Consulting Research & Advisory
Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries, serving the most highly regarded professional services firms and Fortune 500 companies across the globe.
Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide; needs analysis and vendor profiling for buyers of consulting services; timely and insightful intelligence on the top consulting firms in their respective markets; and operational benchmarks that measure consulting performance. Kennedy Consulting Research & Advisory's research spans multiple service areas, client vertical industries, and geographies. Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.
In response, many consultancies are entering into strategic alliances to position themselves as end-to-end providers of IT services, strategy, consulting, systems integration, and managed business services. For client companies that desire "one-stop shopping," firms with ITSP capabilities vary in size from fewer than 500 consultants at KSA, acquired by MCG in 2007 to more than 90,000 at CSC.
"Client demand has fueled much of this trend toward one-stop shopping as organizations seek accountability for the IT strategy delivered," said Leslie Ament, Associate Director of Research, Kennedy Consulting Research & Advisory. "Our research revealed that 60-70% of clients engage with firms that understand the global complications, implications and next steps in downstream execution of a comprehensive IT strategy."
This is in direct contrast to previous trends, in which customers wanted pure ITSP consulting advice from strategy firms such as Bain, BCG, Booz & Co. or McKinsey. Ament added, "Success will now come to those IT strategy and planning practices that change their delivery models, offer pricing alternatives, re-package services, and form strategic alliances with other vendors to increase services breadth on a global basis."
In "IT Strategy and Planning Consulting Marketplace," Kennedy assesses Accenture, Capgemini, CSC, Deloitte, Fujitsu, Hitachi, HP/EDS, IBM, KPMG, KSA, and PwC as firms capable of delivering comprehensive IT consulting services -- from strategic planning through execution. The research ranks leading multi-service, end-to-end, and strategy firms serving the IT strategy and planning consulting marketplace in "The Kennedy Vanguard of Strategy Firms: ITSP Capabilities" and "The Kennedy Vanguard of Multi-Service Firms: ITSP Capabilities," respectively.
Twenty-nine firms are evaluated in total, by both their breadth and depth of services, including: Accenture, Archstone Consulting, Atos Origin, Bain, BearingPoint, Booz Allen Hamilton, Booz & Co., The Boston Consulting Group, Capgemini, Cognizant, CSC, Deloitte, Diamond Management, Fujitsu, Hitachi, HP/EDS, IBM, IDS Scheer, Infosys, KPMG, KSA, McKinsey & Co., Oliver Wyman, PA Consulting, PwC, Roland Berger, Tata, Unisys, and Wipro.
About Kennedy Consulting Research & Advisory
Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries, serving the most highly regarded professional services firms and Fortune 500 companies across the globe.
Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide; needs analysis and vendor profiling for buyers of consulting services; timely and insightful intelligence on the top consulting firms in their respective markets; and operational benchmarks that measure consulting performance. Kennedy Consulting Research & Advisory's research spans multiple service areas, client vertical industries, and geographies. Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.
Thursday, August 27, 2009
Boston Consulting Group Study: Companies Can Beat the Odds of Successfully Globalizing Their R&D by Following Four "Golden Imperatives"
The cost advantages of conducting R&D in rapidly developing economies (RDEs) such as China and India are well established. The Boston Consulting Group (BCG) has observed that MNCs based in developed countries typically can lower their R&D labor costs by 40 to 60 percent in RDEs, compared with their domestic R&D labor costs, according to a new BCG White Paper, "Taking R&D Global: Meeting the Challenge of Getting It Right."
Another important benefit of doing R&D in RDEs is gaining access to large pools of well-trained researchers and engineers. In 2007, RDEs accounted for two-thirds of the global engineering talent pool -- and that share is growing.
But for many leading companies an even greater benefit than lower costs and access to talent is the ability to design and develop products specific to RDEs' fast-growing markets. The IMF has forecast that these economies will drive the entire growth of global GDP in 2010. They are also home to many of the world's "next billion" consumers, who are commonly considered impossible or unprofitable to serve with current business models but who could become profitable to serve with new ones. In 2008 this group already numbered some 3.7 billion people, with earnings of $2.3 trillion -- and those earnings are expected to grow at 8 percent per year to reach $4 trillion in 2015.
Global companies that want to tap into this vast pool of new consumers must develop products and services that cater specifically to their needs, rather than merely tweak existing offerings. And the best way to do that is to be there, employing creative people who know those markets intimately.
A critical aspect of succeeding in globalizing R&D is setting the right objectives for the R&D organization. These include improving the cost-effectiveness and efficiency of R&D, and specifically avoiding the "hidden" costs of doing R&D offshore, which can amount to as much as 35 percent of overall R&D costs. Other critically important objectives are harnessing global talent and innovation, and localizing design and development to capture market growth.
Meeting these objectives generally entails adopting a different design for the R&D organization. R&D centers should end up playing one of three distinct roles: cost cutter / effectiveness master, innovation and talent seeker, or localization leader. Trying to achieve all three objectives at the same time in a new or still-maturing R&D center can jeopardize the center's effectiveness and growth.
A number of companies have failed in their efforts to reap the benefits of globalizing their R&D because they fell into the trap of "unreadiness." In this condition, there is a significant gap between the company's ambitions and its capabilities. This gap triggers a vicious cycle in which the company launches an RDE-based R&D center but fails to empower its people or give it interesting and rewarding projects, so the most highly skilled staff members leave, quality and effectiveness decline, and the center stagnates.
Companies that recognize their own unreadiness can take action by applying the four golden imperatives: globalize your research and innovation, not just your low-value engineering; establish a common language; implement a comprehensive global talent strategy; and leverage local partners without risking intellectual property leaks.
To succeed in globalizing R&D, companies usually must undertake a fundamental transformation of their current way of doing R&D. Often they must take an integrated approach by shifting part of the R&D responsibility away from the historical headquarters to multiple global centers. They may also need to make some tough tradeoffs between their ambition and the pace of transition. And in some cases they will need to shift management's attention away from the company's existing business, in order to focus on new opportunities in growing markets.
To order a copy of "Taking R&D Global: Meeting the Challenge of Getting It Right," or to arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
Another important benefit of doing R&D in RDEs is gaining access to large pools of well-trained researchers and engineers. In 2007, RDEs accounted for two-thirds of the global engineering talent pool -- and that share is growing.
But for many leading companies an even greater benefit than lower costs and access to talent is the ability to design and develop products specific to RDEs' fast-growing markets. The IMF has forecast that these economies will drive the entire growth of global GDP in 2010. They are also home to many of the world's "next billion" consumers, who are commonly considered impossible or unprofitable to serve with current business models but who could become profitable to serve with new ones. In 2008 this group already numbered some 3.7 billion people, with earnings of $2.3 trillion -- and those earnings are expected to grow at 8 percent per year to reach $4 trillion in 2015.
Global companies that want to tap into this vast pool of new consumers must develop products and services that cater specifically to their needs, rather than merely tweak existing offerings. And the best way to do that is to be there, employing creative people who know those markets intimately.
A critical aspect of succeeding in globalizing R&D is setting the right objectives for the R&D organization. These include improving the cost-effectiveness and efficiency of R&D, and specifically avoiding the "hidden" costs of doing R&D offshore, which can amount to as much as 35 percent of overall R&D costs. Other critically important objectives are harnessing global talent and innovation, and localizing design and development to capture market growth.
Meeting these objectives generally entails adopting a different design for the R&D organization. R&D centers should end up playing one of three distinct roles: cost cutter / effectiveness master, innovation and talent seeker, or localization leader. Trying to achieve all three objectives at the same time in a new or still-maturing R&D center can jeopardize the center's effectiveness and growth.
A number of companies have failed in their efforts to reap the benefits of globalizing their R&D because they fell into the trap of "unreadiness." In this condition, there is a significant gap between the company's ambitions and its capabilities. This gap triggers a vicious cycle in which the company launches an RDE-based R&D center but fails to empower its people or give it interesting and rewarding projects, so the most highly skilled staff members leave, quality and effectiveness decline, and the center stagnates.
Companies that recognize their own unreadiness can take action by applying the four golden imperatives: globalize your research and innovation, not just your low-value engineering; establish a common language; implement a comprehensive global talent strategy; and leverage local partners without risking intellectual property leaks.
To succeed in globalizing R&D, companies usually must undertake a fundamental transformation of their current way of doing R&D. Often they must take an integrated approach by shifting part of the R&D responsibility away from the historical headquarters to multiple global centers. They may also need to make some tough tradeoffs between their ambition and the pace of transition. And in some cases they will need to shift management's attention away from the company's existing business, in order to focus on new opportunities in growing markets.
To order a copy of "Taking R&D Global: Meeting the Challenge of Getting It Right," or to arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
Friday, July 17, 2009
Former Education Secretary Margaret Spellings Named Senior Advisor to the Boston Consulting Group
The Boston Consulting Group (BCG) has named Margaret Spellings as a senior advisor. Spellings, an expert on education and work force issues, served as U.S. Secretary of Education and Assistant to the President for Domestic Policy under President George W. Bush. She is currently President and CEO of Margaret Spellings and Company, a Washington, D.C.-based strategic and public policy consulting firm.
"Margaret Spellings' domestic policy expertise will be a huge asset to BCG in our education work and other social-impact efforts in our communities," said J. Puckett, a senior partner in the firm's Dallas office. "Throughout her distinguished career, she has demonstrated an exceptional commitment to public service. We're thrilled to have her working with us."
As Education Secretary from 2005 to 2009, Spellings led the implementation of the bipartisan No Child Left Behind Act (NCLB), a national initiative to provide enhanced accountability for the education of 50 million U.S. public school students. On the postsecondary side, she launched a national policy debate on higher education; launched an action plan to improve accessibility, affordability, and accountability in the nation's colleges and universities; and led the federal government's efforts to ensure access to student loans amid turmoil in the credit markets.
As White House Domestic Policy Advisor from 2001 until 2005, she managed the development of the president's domestic policy agenda, with oversight of education, health, transportation, justice, housing, and labor policy. Her work includes developing and managing the NCLB Act of 2001, the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), and various other initiatives on health and human services, transportation, labor, and housing.
Prior to her service in the White House, she served as Senior Advisor to then-Governor George W. Bush of Texas (1995-2000), led government relations efforts for the Texas Association of School Boards (1988-1994), and served in various leadership capacities for the Texas legislature.
Founded in 1963, The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. The firm has 66 offices in 38 countries and serves companies in all industries and markets.
"Margaret Spellings' domestic policy expertise will be a huge asset to BCG in our education work and other social-impact efforts in our communities," said J. Puckett, a senior partner in the firm's Dallas office. "Throughout her distinguished career, she has demonstrated an exceptional commitment to public service. We're thrilled to have her working with us."
As Education Secretary from 2005 to 2009, Spellings led the implementation of the bipartisan No Child Left Behind Act (NCLB), a national initiative to provide enhanced accountability for the education of 50 million U.S. public school students. On the postsecondary side, she launched a national policy debate on higher education; launched an action plan to improve accessibility, affordability, and accountability in the nation's colleges and universities; and led the federal government's efforts to ensure access to student loans amid turmoil in the credit markets.
As White House Domestic Policy Advisor from 2001 until 2005, she managed the development of the president's domestic policy agenda, with oversight of education, health, transportation, justice, housing, and labor policy. Her work includes developing and managing the NCLB Act of 2001, the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), and various other initiatives on health and human services, transportation, labor, and housing.
Prior to her service in the White House, she served as Senior Advisor to then-Governor George W. Bush of Texas (1995-2000), led government relations efforts for the Texas Association of School Boards (1988-1994), and served in various leadership capacities for the Texas legislature.
Founded in 1963, The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. The firm has 66 offices in 38 countries and serves companies in all industries and markets.
Friday, April 17, 2009
Healthcare Consulting to Outperform Other Industry Practices
The healthcare industry represents one of the few growth opportunities for consulting firms over the next three years according to consulting market research firm Kennedy Consulting Research & Advisory. As other industry practice areas struggle to remain flat in year-over-year business prospects, healthcare will remain an industry of investment, mitigating some of the effects of the recession on consulting spending.
While disparity exists within each of the four healthcare consulting sub-segments analyzed in Kennedy's research, client consulting spending in Life Sciences, Providers, Payers and Public Health Organizations will remain positive throughout the 2008-2012 forecast period, decelerating only in 2009.
"With the healthcare industry representing a significant and growing opportunity for consultants, firms of all types are expanding their healthcare practices and building up their healthcare industry expertise," said Kelly Matthews, Associate Director of Research for Kennedy. "They are doing so through targeted hires of PhDs, physicians, nurses, and scientists as well as acquisitions of specialty firms."
The findings are a result of Kennedy's ongoing research in its Healthcare "Industry Practices Series" and annual state of the market research, "Healthcare Consulting Marketplace 2009-2012." The new research analyzes key market trends and drivers across the four industry sub-sectors in North America, EMEA, APAC, and Latin America by major consulting service lines (Business Advisory Services, Information Technology, Human Resources, Operational Management and Strategy).
Kennedy analysts identified the strongest consulting firms for each of the four healthcare industry sub-sectors. Leading firms rated in "The Kennedy Vanguard for Life Sciences Consulting Practices" and for the other three sub-sectors analyzed. Only one firm's healthcare consulting practice rated in "The Kennedy Vanguard" across all four healthcare sub-sectors.
Among the healthcare consulting practices Kennedy tracks and analyzed for this report were Accenture, BearingPoint, Booz Allen Hamilton, The Boston Consulting Group, Capgemini, CSC, Deloitte, Huron Consulting Group, IBM Global Services, IMS Health, Ingenix Consulting, KPMG, McKinsey & Company, Navigant Consulting, Quintiles Consulting, PricewaterhouseCoopers and Putnam Associates.
About Kennedy Consulting Research & Advisory
Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries.
Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide, needs analysis and vendor profiling for buyers of consulting services, timely and insightful intelligence on the top consulting firms in their respective markets, and operational benchmarks that measure consulting performance. Kennedy's research spans multiple service areas, client vertical industries, and geographies.
Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.
Kennedy's clientele consists of the most highly regarded professional services firms and Fortune 500 companies in the world.
While disparity exists within each of the four healthcare consulting sub-segments analyzed in Kennedy's research, client consulting spending in Life Sciences, Providers, Payers and Public Health Organizations will remain positive throughout the 2008-2012 forecast period, decelerating only in 2009.
"With the healthcare industry representing a significant and growing opportunity for consultants, firms of all types are expanding their healthcare practices and building up their healthcare industry expertise," said Kelly Matthews, Associate Director of Research for Kennedy. "They are doing so through targeted hires of PhDs, physicians, nurses, and scientists as well as acquisitions of specialty firms."
The findings are a result of Kennedy's ongoing research in its Healthcare "Industry Practices Series" and annual state of the market research, "Healthcare Consulting Marketplace 2009-2012." The new research analyzes key market trends and drivers across the four industry sub-sectors in North America, EMEA, APAC, and Latin America by major consulting service lines (Business Advisory Services, Information Technology, Human Resources, Operational Management and Strategy).
Kennedy analysts identified the strongest consulting firms for each of the four healthcare industry sub-sectors. Leading firms rated in "The Kennedy Vanguard for Life Sciences Consulting Practices" and for the other three sub-sectors analyzed. Only one firm's healthcare consulting practice rated in "The Kennedy Vanguard" across all four healthcare sub-sectors.
Among the healthcare consulting practices Kennedy tracks and analyzed for this report were Accenture, BearingPoint, Booz Allen Hamilton, The Boston Consulting Group, Capgemini, CSC, Deloitte, Huron Consulting Group, IBM Global Services, IMS Health, Ingenix Consulting, KPMG, McKinsey & Company, Navigant Consulting, Quintiles Consulting, PricewaterhouseCoopers and Putnam Associates.
About Kennedy Consulting Research & Advisory
Since 1970, Kennedy Consulting Research & Advisory, a division of Kennedy Information, has been the world's leading source of market analysis on the Management Consulting and IT Consulting industries.
Kennedy provides accurate and reliable market sizing and forecasts for consulting services world-wide, needs analysis and vendor profiling for buyers of consulting services, timely and insightful intelligence on the top consulting firms in their respective markets, and operational benchmarks that measure consulting performance. Kennedy's research spans multiple service areas, client vertical industries, and geographies.
Kennedy's stand-alone consulting advisory unit, Kennedy Information Advisors, provides results-oriented strategic guidance to buyers and sellers of consulting services.
Kennedy's clientele consists of the most highly regarded professional services firms and Fortune 500 companies in the world.
Wednesday, April 8, 2009
Boston Consulting Group: The Gap Between the Corporate 'Haves' and 'Have-Nots' Is Widening Dramatically in the Global Economic Crisis
The global economic crisis -- and the failure of many companies to tackle it in a fast and effective way -- is giving companies already dominant in their industry the chance to stretch their lead over their competitors, according to a paper published today by The Boston Consulting Group (BCG).
In "Collateral Damage, Part 6: Underestimating the Crisis," which is based on a survey of 439 companies with sales of at least $1 billion from seven of the world's leading economies, BCG found that top companies -- those ranked first in their industry -- have been growing revenues and profitability throughout the downturn. By contrast, those companies ranked outside the top three have been heavily affected by the economic crisis and have suffered declines in revenues and profitability.
BCG found that the contrasting fortunes of the "haves" and "have-nots" are no accident. The chief executives running top companies have recognized the seriousness of the crisis and have been deploying some of the tactics more commonly used by companies undergoing turnaround transformations. The leaders of their weaker rivals, however, have taken an overly optimistic view of their prospects -- and if some are finally starting to take action, it is too little, too late.
David Rhodes, global leader of the firm's Financial Institutions practice and a coauthor of the report, said, "Although market leaders have been less affected by the downturn so far, they are doing more to tackle the worst effects of the crisis -- both for short-term protection and to benefit in the long term. In contrast, middle-of-the-market players are now running the risk of losing even more ground: they have been more severely affected, yet they are doing less to counter the downturn."
In the survey, conducted in March, BCG found the following:
-- 55 percent of market leaders grew revenues in 2008, compared with 40 percent for the second and third players in a market and only 22 percent of companies outside the top three
-- 58 percent of market leaders increased profitability in 2008, with less than a third seeing declining profits, compared with only 21 percent of companies outside the top three seeing improvements
The optimism of many companies -- despite the calamitous impact of the economic downturn on the world economy -- suggests that their CEOs are struggling to come to terms with what BCG has elsewhere called the "new realities" of the world in crisis. (See Part 5 of the "Collateral Damage" series, "Confronting the New Realities of a World in Crisis.")
More than 60 percent of companies thought that the International Monetary Fund had overstated the seriousness of the crisis in its January forecast of global GDP. When the IMF subsequently revised its forecast downward in March -- projecting the first global economic contraction since World War II -- these companies were even more badly out of line.
In another sign of corporate misjudgment, more than two-thirds described as "satisfactory" or "very satisfactory" the speed of their company's reaction, the quality of their action plan, and the capability of both senior and middle management to address the economic challenges effectively.
In addition to misreading the signals from the wider economy, a high proportion of top executives insist that the prospects of their own company are better than those of their competitors:
-- While nearly two-thirds said that the profitability of their industry as a whole would decline, more than 40 percent forecast higher profitability for their own companies
-- While more than 70 percent predicted increased price sensitivity in their customer population, more than one-third admitted that they were budgeting for increased selling prices; only a third expected their own prices to decline
-- Some 55 percent expected their company to emerge stronger from the crisis; only 15 percent expected to emerge weaker
Daniel Stelter, global leader of BCG's Corporate Development practice and the other coauthor of the report, said, "We find it astonishing that companies are still underestimating the size and scope of the economic crisis. They are generally too optimistic about their own performance and believe that they have taken sufficient steps to respond to the crisis. Consequently, although taking action, companies have not adopted adequate measures either to protect themselves from the worst effects of the downturn or to prepare for the upturn."
Market Leaders' Secrets: Ten Actions for Beating the Downturn
In the BCG survey, market-leading companies identified the following actions as key to their success:
-- Undertaking more frequent reviews of their budgets and plans, typically every quarter
-- Tracking the external environment -- both macroeconomic and industry indicators -- with far greater seriousness
-- Preparing for the downturn by acting early to reduce operating costs and overhead while optimizing working capital -- even though they have typically been less affected than their lower-ranked rivals
-- Aggressively acting to protect cash by reducing working-capital requirements, postponing capital expenditures, and paying down debt
-- Variabilizing fixed costs and reducing breakeven levels by reevaluating outsourcing and opportunities to increase shared services
-- Cutting costs more decisively by reducing production capacity and more aggressively laying off employees
-- Actively exiting underperforming businesses and divesting assets
-- To a greater degree than other companies in the survey, trying to secure future growth by investing in R&D and innovation
-- Protecting and growing their existing revenue base by increasing marketing expenditures and focusing on key accounts
-- De-averaging the actions they are taking by simultaneously cutting costs or capacity or increasing expenditures or capacity in different parts of their portfolios, depending on potential, as well as opportunistically seeking attractive acquisition opportunities while not shying away from difficult decisions about underperforming businesses
BCG's Collateral Damage Series
Based on its long history of helping companies survive and thrive during global economic downturns, BCG created its "Collateral Damage" series, which explains the background to the current troubles, analyzes the impact of government actions around the world, explores likely economic scenarios, and examines the challenges facing companies outside the financial sector. The series provides a big-picture analysis of the crisis as it has evolved in different regions, countries, and sectors. It also offers senior executives practical guidance for protecting their companies from the worst of the crisis and for preparing them for economic recovery. Current titles in the series include the following:
-- "Collateral Damage, Part 1: What the Crisis in the Credit Markets Means for Everyone Else"
-- "Collateral Damage, Part 2: Taking Robust Action in the Face of the Growing Crisis"
-- "Collateral Damage, Part 3: Asia, Advantage, and Action"
-- "Collateral Damage, Part 4: Preparing for a Tough Year Ahead: The Outlook, the Crisis in Perspective, and Lessons from the Early Movers"
-- "Collateral Damage, Part 5: Confronting the New Realities of a World in Crisis"
To receive a copy of the latest paper or arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
In "Collateral Damage, Part 6: Underestimating the Crisis," which is based on a survey of 439 companies with sales of at least $1 billion from seven of the world's leading economies, BCG found that top companies -- those ranked first in their industry -- have been growing revenues and profitability throughout the downturn. By contrast, those companies ranked outside the top three have been heavily affected by the economic crisis and have suffered declines in revenues and profitability.
BCG found that the contrasting fortunes of the "haves" and "have-nots" are no accident. The chief executives running top companies have recognized the seriousness of the crisis and have been deploying some of the tactics more commonly used by companies undergoing turnaround transformations. The leaders of their weaker rivals, however, have taken an overly optimistic view of their prospects -- and if some are finally starting to take action, it is too little, too late.
David Rhodes, global leader of the firm's Financial Institutions practice and a coauthor of the report, said, "Although market leaders have been less affected by the downturn so far, they are doing more to tackle the worst effects of the crisis -- both for short-term protection and to benefit in the long term. In contrast, middle-of-the-market players are now running the risk of losing even more ground: they have been more severely affected, yet they are doing less to counter the downturn."
In the survey, conducted in March, BCG found the following:
-- 55 percent of market leaders grew revenues in 2008, compared with 40 percent for the second and third players in a market and only 22 percent of companies outside the top three
-- 58 percent of market leaders increased profitability in 2008, with less than a third seeing declining profits, compared with only 21 percent of companies outside the top three seeing improvements
The optimism of many companies -- despite the calamitous impact of the economic downturn on the world economy -- suggests that their CEOs are struggling to come to terms with what BCG has elsewhere called the "new realities" of the world in crisis. (See Part 5 of the "Collateral Damage" series, "Confronting the New Realities of a World in Crisis.")
More than 60 percent of companies thought that the International Monetary Fund had overstated the seriousness of the crisis in its January forecast of global GDP. When the IMF subsequently revised its forecast downward in March -- projecting the first global economic contraction since World War II -- these companies were even more badly out of line.
In another sign of corporate misjudgment, more than two-thirds described as "satisfactory" or "very satisfactory" the speed of their company's reaction, the quality of their action plan, and the capability of both senior and middle management to address the economic challenges effectively.
In addition to misreading the signals from the wider economy, a high proportion of top executives insist that the prospects of their own company are better than those of their competitors:
-- While nearly two-thirds said that the profitability of their industry as a whole would decline, more than 40 percent forecast higher profitability for their own companies
-- While more than 70 percent predicted increased price sensitivity in their customer population, more than one-third admitted that they were budgeting for increased selling prices; only a third expected their own prices to decline
-- Some 55 percent expected their company to emerge stronger from the crisis; only 15 percent expected to emerge weaker
Daniel Stelter, global leader of BCG's Corporate Development practice and the other coauthor of the report, said, "We find it astonishing that companies are still underestimating the size and scope of the economic crisis. They are generally too optimistic about their own performance and believe that they have taken sufficient steps to respond to the crisis. Consequently, although taking action, companies have not adopted adequate measures either to protect themselves from the worst effects of the downturn or to prepare for the upturn."
Market Leaders' Secrets: Ten Actions for Beating the Downturn
In the BCG survey, market-leading companies identified the following actions as key to their success:
-- Undertaking more frequent reviews of their budgets and plans, typically every quarter
-- Tracking the external environment -- both macroeconomic and industry indicators -- with far greater seriousness
-- Preparing for the downturn by acting early to reduce operating costs and overhead while optimizing working capital -- even though they have typically been less affected than their lower-ranked rivals
-- Aggressively acting to protect cash by reducing working-capital requirements, postponing capital expenditures, and paying down debt
-- Variabilizing fixed costs and reducing breakeven levels by reevaluating outsourcing and opportunities to increase shared services
-- Cutting costs more decisively by reducing production capacity and more aggressively laying off employees
-- Actively exiting underperforming businesses and divesting assets
-- To a greater degree than other companies in the survey, trying to secure future growth by investing in R&D and innovation
-- Protecting and growing their existing revenue base by increasing marketing expenditures and focusing on key accounts
-- De-averaging the actions they are taking by simultaneously cutting costs or capacity or increasing expenditures or capacity in different parts of their portfolios, depending on potential, as well as opportunistically seeking attractive acquisition opportunities while not shying away from difficult decisions about underperforming businesses
BCG's Collateral Damage Series
Based on its long history of helping companies survive and thrive during global economic downturns, BCG created its "Collateral Damage" series, which explains the background to the current troubles, analyzes the impact of government actions around the world, explores likely economic scenarios, and examines the challenges facing companies outside the financial sector. The series provides a big-picture analysis of the crisis as it has evolved in different regions, countries, and sectors. It also offers senior executives practical guidance for protecting their companies from the worst of the crisis and for preparing them for economic recovery. Current titles in the series include the following:
-- "Collateral Damage, Part 1: What the Crisis in the Credit Markets Means for Everyone Else"
-- "Collateral Damage, Part 2: Taking Robust Action in the Face of the Growing Crisis"
-- "Collateral Damage, Part 3: Asia, Advantage, and Action"
-- "Collateral Damage, Part 4: Preparing for a Tough Year Ahead: The Outlook, the Crisis in Perspective, and Lessons from the Early Movers"
-- "Collateral Damage, Part 5: Confronting the New Realities of a World in Crisis"
To receive a copy of the latest paper or arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
Thursday, April 2, 2009
ASSEMBLY Magazine and The Boston Consulting Group to Jointly Sponsor Award for 'Assembly Plant of the Year'
ASSEMBLY magazine, a leading trade publication for manufacturers, and The Boston Consulting Group (BCG) today announced plans to jointly sponsor an award for "Assembly Plant of the Year." The award will recognize a manufacturing facility in the United States that has applied world-class processes to reduce production costs, increase productivity, shorten time to market, or improve product quality.
Entries will be judged on a broad range of operational performance measures and the use of manufacturing management tools. The winning facility will be featured along with the other finalists in ASSEMBLY's October 2009 issue.
"BCG is pleased to cosponsor this award, particularly now given the economic downturn and the challenges that the manufacturing sector faces," said Michael Zinser, a partner in BCG's Chicago office. "At a time when many companies have moved their manufacturing operations overseas to cut costs, this award will highlight the strengths of U.S. plants and the ongoing competitiveness of those that demonstrate excellence and innovation."
This will be the sixth annual "Assembly Plant of the Year" award. Previous recipients have been IBM in Poughkeepsie, NY (2008), Schneider Electric/Square D in Lexington, KY (2007), Lear Corporation in Montgomery, AL (2006), Xerox Corporation in Webster, NY (2005), and Paccar Inc./Kenworth Truck Company in Renton, WA (2004).
"Our goal is to broaden the global exposure of the 'Assembly Plant of the Year' award, while continuing to emphasize world-class American manufacturing," said Austin Weber, senior editor of ASSEMBLY. "This partnership will allow us to enhance the prestige of the award by leveraging BCG's expertise in operations."
Companies interested in applying can fill out the online form at www.assemblymag.com. There is no entry fee and more than one plant may be nominated. The deadline for submissions is April 30, 2009.
About ASSEMBLY
ASSEMBLY is a monthly trade magazine that has been published since 1958. It is read by plant managers, manufacturing engineers, and design engineers in a wide variety of industries, including automotive, aerospace, appliances, consumer goods, electronics, industrial machinery, medical devices, and telecommunications. ASSEMBLY covers the systems, equipment, tools, and materials used by OEMs and contract manufacturers to assemble discrete parts into finished products, including manual and automated production processes. ASSEMBLY is published by BNP Media II LLC.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries.
For more information, please visit www.bcg.com.
Entries will be judged on a broad range of operational performance measures and the use of manufacturing management tools. The winning facility will be featured along with the other finalists in ASSEMBLY's October 2009 issue.
"BCG is pleased to cosponsor this award, particularly now given the economic downturn and the challenges that the manufacturing sector faces," said Michael Zinser, a partner in BCG's Chicago office. "At a time when many companies have moved their manufacturing operations overseas to cut costs, this award will highlight the strengths of U.S. plants and the ongoing competitiveness of those that demonstrate excellence and innovation."
This will be the sixth annual "Assembly Plant of the Year" award. Previous recipients have been IBM in Poughkeepsie, NY (2008), Schneider Electric/Square D in Lexington, KY (2007), Lear Corporation in Montgomery, AL (2006), Xerox Corporation in Webster, NY (2005), and Paccar Inc./Kenworth Truck Company in Renton, WA (2004).
"Our goal is to broaden the global exposure of the 'Assembly Plant of the Year' award, while continuing to emphasize world-class American manufacturing," said Austin Weber, senior editor of ASSEMBLY. "This partnership will allow us to enhance the prestige of the award by leveraging BCG's expertise in operations."
Companies interested in applying can fill out the online form at www.assemblymag.com. There is no entry fee and more than one plant may be nominated. The deadline for submissions is April 30, 2009.
About ASSEMBLY
ASSEMBLY is a monthly trade magazine that has been published since 1958. It is read by plant managers, manufacturing engineers, and design engineers in a wide variety of industries, including automotive, aerospace, appliances, consumer goods, electronics, industrial machinery, medical devices, and telecommunications. ASSEMBLY covers the systems, equipment, tools, and materials used by OEMs and contract manufacturers to assemble discrete parts into finished products, including manual and automated production processes. ASSEMBLY is published by BNP Media II LLC.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries.
For more information, please visit www.bcg.com.
Wednesday, March 11, 2009
MIT Sloan Management Review and The Boston Consulting Group Announce Major Collaboration on Sustainability and Management
MIT Sloan Management Review and The Boston Consulting Group (BCG) today announced the launch of a major, multi-year collaboration, The Sustainability Initiative: A Collaboration to Make Business Sense of Sustainability. Comprising joint research and an online discussion hub aimed at management practitioners and leaders, the Initiative will explore emerging thinking on sustainability and its implications for business strategy and organization.
Says Michael Hopkins, editor-in-chief of MIT SMR, "The vital need for society to address its environmental, economic, and social challenges will end up transforming the ways we all work, live, and compete. It will have extraordinary implications for organizations and the people who lead them -- work processes, organizational models, competitive strategies, and leadership methods are all going to be affected. But how? And why? And in what specific ways? That's what we'll explore."
The Sustainability Initiative at MIT SMR grew out of shared, intense interest in the subject and a desire to capitalize on the combined intellectual resources of MIT and BCG. For BCG, opportunities for competitive advantage created by the challenges of sustainability are a key focus for clients and prospects. And for MIT SMR, sustainability is an important aspect of the journal's sharpened focus on innovation, change management, and the future of business.
"We are excited to join forces with MIT Sloan Management Review on this wide-ranging initiative," says Martin Reeves, a senior partner who leads the BCG's Strategy Institute, a business-strategy think tank. "Helping leaders adopt sustainable business practices and strategies that create competitive advantage is a priority for BCG and our clients. At the same time, this initiative reinforces our commitment to social impact, which is an integral part of our organization."
The Initiative launched in December with an online discussion hub at MIT SMR. The two organizations are also in the early stages of joint research and expect to release initial results in the summer of 2009. The collaboration will extend to three areas, in addition to the research: 1) Feature articles and reporting on sustainability and management issues; 2) Beyond Green, a management blog on sustainability; and 3) the Sustainability Resource Guide, an online list of best articles, websites, and other sources of insight for managers.
About MIT Sloan Management Review
A web site and print magazine published at the MIT Sloan School of Management, MIT SMR's mission is to host the conversation about the future of management practice among thinkers, professors, and managers. MIT SMR captures the creativity, excitement, and opportunity created by rapid societal, economic, and technological change, and brings it home to thoughtful managers.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. BCG partners with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. BCG's customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that the firm's clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
Says Michael Hopkins, editor-in-chief of MIT SMR, "The vital need for society to address its environmental, economic, and social challenges will end up transforming the ways we all work, live, and compete. It will have extraordinary implications for organizations and the people who lead them -- work processes, organizational models, competitive strategies, and leadership methods are all going to be affected. But how? And why? And in what specific ways? That's what we'll explore."
The Sustainability Initiative at MIT SMR grew out of shared, intense interest in the subject and a desire to capitalize on the combined intellectual resources of MIT and BCG. For BCG, opportunities for competitive advantage created by the challenges of sustainability are a key focus for clients and prospects. And for MIT SMR, sustainability is an important aspect of the journal's sharpened focus on innovation, change management, and the future of business.
"We are excited to join forces with MIT Sloan Management Review on this wide-ranging initiative," says Martin Reeves, a senior partner who leads the BCG's Strategy Institute, a business-strategy think tank. "Helping leaders adopt sustainable business practices and strategies that create competitive advantage is a priority for BCG and our clients. At the same time, this initiative reinforces our commitment to social impact, which is an integral part of our organization."
The Initiative launched in December with an online discussion hub at MIT SMR. The two organizations are also in the early stages of joint research and expect to release initial results in the summer of 2009. The collaboration will extend to three areas, in addition to the research: 1) Feature articles and reporting on sustainability and management issues; 2) Beyond Green, a management blog on sustainability; and 3) the Sustainability Resource Guide, an online list of best articles, websites, and other sources of insight for managers.
About MIT Sloan Management Review
A web site and print magazine published at the MIT Sloan School of Management, MIT SMR's mission is to host the conversation about the future of management practice among thinkers, professors, and managers. MIT SMR captures the creativity, excitement, and opportunity created by rapid societal, economic, and technological change, and brings it home to thoughtful managers.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. BCG partners with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. BCG's customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that the firm's clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 66 offices in 38 countries. For more information, please visit www.bcg.com.
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