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.

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.

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.