Difference between Strategy and Management Consulting

The business world is becoming more complex and changing quickly, with many businesses needing outside help to deal with challenges and take advantage of new opportunities. This has led to the growth of the consulting industry, with strategy and management consulting being two important areas. While both are aimed at making a business better, they have different focuses and ways of operating. 

In this article, we will explore the key differences between them by looking at what they are, the questions they address, the projects they do, and a real world example to show their specific work.

What Is Strategy Consulting?

Strategy consulting provides expert advice to companies on business decisions to help them achieve long term success. This involves thoroughly analyzing their situation, identifying problems and opportunities, and developing strategic advice. The main goal is to help organizations determine their overall business strategy, especially when they’re starting out or facing significant challenges. 

Strategy consultants help companies make informed decisions that improve their competitiveness and reach their desired goals. They typically work with top executives, focusing on the fundamental “what” and “why” behind key business choices.

Who Needs Strategy Consulting?

Strategy consultant services are used by a wide variety of organizations in different types of situations. Startup businesses need their help in coming up with initial strategies, while established companies use them to overcome challenges or identify new growth possibilities. They are essential in mergers and acquisitions, market expansion, and gaining a competitive edge. Organizations also seek their unbiased expertise for complex problems. 

Practically, any organization that encounters vital decisions making regarding its future or needing innovative solutions can benefit from engaging with strategy consulting services.

What questions does a strategy consultant answer?

Strategy consultants help organizations determine their path by addressing fundamental questions. These inquiries often cover a few areas such as:

• What new markets should we enter?
• What is our competitive advantage?
• Should we divest Business Unit Y?
• What is the long-term vision of the company?
• What results do we seek from this strategic business decision?

Other than these specific questions, strategy consultants also engage in a wide array of activities to support their clients. This includes analyzing complex issues, prioritizing projects, leveraging data for informed decisions, and more activities on the strategic part of a business. Ultimately, the focus is to help organizations define their business direction and scope.

What Are Typical Projects in Strategy Consulting?

The initial stage of a strategy consulting engagement is the strategy phase. During this phase, strategy consultants will collaborate with top-level executives to identify and prioritize the most impactful strategic projects. The aim is to significantly increase shareholder value and drive business growth, which are usually measured by profit margins or revenues.

A frequent catalyst for businesses to engage with strategy consulting services is the appointment of a new CEO. The new CEO would oftentimes want to establish a strategic vision for their tenure, usually a 5 years plan, with specific business targets like increasing net profit by 15%. Strategy consultants will work closely with the executive team to determine the best approach to achieving these goals, taking into consideration factors such as competitors, market conditions, and the business’s stand in the market. Once the direction is established, the responsibility for putting it into action falls to the company’s internal teams and potentially management consultants.

Strategy consulting projects are considerably shorter than the following implementation phase, typically lasting only four to eight weeks while the implementation may take up to 5 years. This makes them highly intensive and heavily relies on thorough research.

Examples of Projects in Strategy Consulting

Strategy consulting focuses on defining the fundamental “what” and “why” behind a business’s long-term success. These projects address high-level issues that shape a company’s direction, market position, and competitive advantage. They usually involve close collaboration with C-suite executives and the Board of Directors over a short, intensive period typically between four and eight weeks.

Below are common types of projects undertaken in strategy consulting:

1. Corporate Strategy and Growth

• Developing a five-year strategic vision for a newly appointed CEO, including clear financial targets such as a 15% increase in net profit or revenue.
• Identifying and evaluating new market entry opportunities by assessing market attractiveness, potential returns, and required resources.
• Determining whether to diversify into adjacent industries or introduce new product lines.
• Conducting a fundamental review of the company’s business model to ensure long-term viability and competitiveness.

2. Mergers and Acquisitions (M&A) Strategy

• Developing an M&A roadmap, identifying acquisition targets that align with the company’s strategic goals.
• Conducting commercial due diligence to assess the target company’s market position, strategic fit, and potential synergies before finalizing a deal.
• Advising on divestitures or the sale of non-core business units to improve focus and profitability.

3. Competitive Strategy

• Analysing the competitive landscape and designing a strategy to achieve sustainable advantage through cost leadership, differentiation, or innovation.
• Creating strategic responses to emerging disruptions from new technologies or market entrants.
• Developing pricing strategies for core products or services based on market trends, competitor behaviour, and customer value perception.

4. Organizational Strategy

• Recommending changes to the organizational structure to align with the company’s long-term strategic direction.
• Prioritizing strategic initiatives and allocating resources to projects that create the greatest shareholder value.
• Developing a digital transformation strategy to guide future technology investments and capability building.

These projects aim to answer big-picture questions “What should we do?” and “Why should we do it?” while setting the foundation for long-term success. The implementation of these recommendations is typically carried out by the company’s internal teams or by management consultants focused on execution.

What Is Management Consulting?

Management consulting helps businesses work more efficiently and improve success by fixing problems and improving results. While strategy consulting looks at the long term future, management consulting focuses on the “how” to make things work better right now. 

Management consultants handle high level business issues that concern CEOs, chairpersons and boards of directors, usually examining what a business is doing, finding ways to improve, and creating solutions for areas like business, marketing, and how employees work. They bring fresh ideas and proven methods to help businesses reach their goals and often even help putting those ideas into action.

Who needs management consulting?

A lot of different businesses facing tough issues or are undergoing major changes would often need management consultants. This includes big companies in sectors like finance, healthcare, and tech that want to improve and grow. They bring special skills and offer a fresh, unbiased point of view.

Management consultants also work with non-profits and even smaller companies. Their main aim is usually to help boost efficiency, save money, and improve how the business works as a whole. Small businesses often use them to get better at what they’re currently doing or when they’re trying to venture into new areas. The consultants are there to help find and fix problems, helping businesses become more successful and efficient.

What questions does a management consultant answer?

Management consultants help organizations improve their performance and efficiency by addressing a wide range of questions. These inquiries often cover a few areas such as:

• How can we improve employee productivity?
• How can operational efficiency be improved?
• What changes can be made to improve financial performance?
• What organizational structure and staffing adjustments are needed?
• Where can we improve our profitability?
• What items are hurting our business?

Additionally, management consultants may also be involved in workforce transition planning and other specialized projects according to the specific needs of their clients. These include standardizing business processes, centralizing operations, providing large scale transformation initiatives, and more.

What Are Typical Projects in Management Consulting?

Management consulting projects are focused on helping businesses improve their performance and efficiency. Consultants work with businesses to identify problems in their operations, develop solutions, and often help implement those solutions. These projects aim to make the company run more smoothly, reduce costs, increase revenue, or improve customer satisfaction.

Imagine a small coffee shop is experiencing declining customer traffic during the afternoon hours. A management consultant would analyze sales data, observe customer behaviour, and survey customers to identify the cause. After finding out it is caused by the limited menu and less appealing atmosphere in the afternoon, they might suggest introducing new afternoon menu items, redesigning the seating area for a more relaxed afternoon vibe. The consultant might even help the coffee shop chain with designing the new menu and planning the seating changes.

The goal of this management consulting project would be to identify the reasons for the decline in afternoon traffic and implement practical solutions to improve the situation.

Examples of Projects in Management Consulting

Management consulting focuses on solving the fundamental “how” of business, translating strategic direction into daily operational excellence. These projects are implementation-focused, usually lasting between three and twelve months, and aim to achieve measurable improvements in efficiency, cost, and process flow. Management consultants work with various levels of management to execute change across the organisation.

Below are common types of projects undertaken in management consulting:

1. Operational Improvement and Efficiency

• Designing and implementing Lean management principles to streamline manufacturing or service delivery processes, reducing waste and time.
• Conducting a comprehensive supply chain review to identify bottlenecks, reduce inventory costs, and optimise vendor relationships.
• Implementing a shared services model for internal functions like HR or finance to centralise support and cut overhead costs by 20 percent.

2. Technology and Digital Implementation

• Selecting and deploying a new Enterprise Resource Planning, ERP, system to integrate financial, sales, and inventory data across the business.
• Developing and rolling out a new Customer Relationship Management, CRM, platform to improve sales team productivity and customer tracking.
• Standardizing and centralizing IT infrastructure to enhance data security and system reliability.

3. Organisational and Change Management

• Developing a new performance management framework, including Key Performance Indicators, KPIs, and appraisal systems, to boost employee productivity.
• Designing and implementing a post-merger integration plan to harmonise two company cultures, processes, and systems following an M and A deal.
• Creating a specific change management strategy to help employees adapt to major shifts in technology or reporting structures.

These projects focus on answering the question, “How should we do it,” ensuring the business runs smoothly, profitably, and in alignment with the high-level strategy.

Key Skills Required for Each Role

The different responsibilities of strategy and management consultants mean they need to be good at different things. It’s not just about solving problems, it’s about the type of problems they are equipped to handle.

For Strategy Consultants

Strategy consultants need skills that focus on big-picture thinking and deep analysis because their work is all about setting the company’s long-term direction:

• Deep Analytical Thinking: They must be able to take huge amounts of data, market trends, and competitive reports, then quickly figure out what the information really means for the business. They often use complex frameworks to break down difficult, open-ended problems into manageable pieces.
• Strong Conceptual Problem-Solving: Strategy questions don’t have easy answers. They need to be able to design a solution from scratch and create a persuasive business case for why their recommendation is the best path forward. They aren’t executing a plan, they are creating the plan itself.
• Extensive Industry Expertise: When advising a CEO on market entry, they need to sound like an expert in that specific market from day one. Their advice must be informed by a deep understanding of industry structure, competitor moves, and future trends.
• Visionary Perspective: They focus on the ‘What” and the “Why”. They must look years ahead, anticipating how changes in technology, regulation, or consumer behavior will affect the company’s competitive advantage.

For Management Consultants

Management consultants are focused on operational effectiveness and getting results in the near term. Their skills are geared toward practical implementation and managing change:

• Operational Knowledge: They are experts in the “How”. They know how a supply chain should run, how a finance department should be structured, or how a software system should be implemented. They use industry best practices to identify and fix bottlenecks.
• Effective Change Management: Once a new process or system is designed, the hardest part is getting employees to adopt it. Management consultants are skilled at training staff, communicating the benefits of the change, and helping the organization adapt smoothly to new ways of working. 
• Meticulous Project Management:Their projects are often longer (months) and involve many moving parts across different departments. They need to be highly organized, managing budgets, timelines, and teams to ensure the implementation is completed successfully and on schedule.
• Proven Replicable Methods: They often rely on standardized, repeatable frameworks (like Lean or Six Sigma) to ensure that the solutions they implement are robust, measurable, and can be maintained by the client long after the consultant leaves.

What Are The Differences Between Strategy and Management Consulting?

Feature	Strategy Consulting	Management Consulting
Focus	Long term direction, market positioning, business growth	Efficiency, process  and performance  improvement
Focus Timeframe	3-5 years	3-12 months
Level of Involvement	C-suite executives, board members	Various management levels
Typical Outcomes	Shape future direction, new opportunities, create competitive edge	Improve current efficiency and, reduce costs
Question Type	What? Why?	How?

While both aim to improve organizations, strategy and management consulting differ in several key ways. Here are further elaborations on the differences:

Strategy consulting focuses on a company’s long term direction, market position, and growth strategy for up to 5 years. Strategy consultants advise top executives on high level decision making, aiming to shape the company’s future and create a lasting competitive advantage. They address broad questions of “what” and “why” and often work on shorter, intensive projects lasting a few weeks.

Management consulting on the other hand, focuses on improving a company’s day-to-day operations and efficiency within its existing strategy, with a shorter to medium term focus of a few months and up to a year. Management consultants work with various levels of staff to implement changes and improve processes, boosting the business efficiency. They typically focus on “how” to achieve a specific goal and often have longer project durations.

Conclusion

In short, both strategy and management consultants help organizations succeed, but they focus on different things and work with different levels of employees.
If a company needs to decide its future direction and find new ways to grow, strategy consulting is probably the way to go but if they need help improving the efficiency and cost effectiveness of its current operations, management consulting would be a better fit. Keep in mind that many consulting companies, like us at Zomara Group, do both and sometimes there’s no clear distinction between the two. Contact us to learn more about how our strategy and management consulting can help your business.