Businessmodel of Bain & Company

Customer Segments

Bain has a mass market business model, with no significant differentiation between customer segments. The company targets organizations in all types of industries, including small startups, mid-size companies, large multinational corporations, nonprofits, governments, and private equity firms.

Value Proposition

Bain offers three primary value propositions: innovation, performance, and brand/status.

The company has a long history of innovation. Its groundbreaking offerings include the following:

• Bain maintains “tied economics“ arrangements with its customers that enable it to better align its financial incentives with client results
• Bain pioneered strategic consulting for private equity firms, with solutions including hands-on performance improvement for portfolio companies and due diligence during acquisition
• Bain maintains The Bridgespan Group, described as the first company to provide high-level strategy consulting solutions for the non-profit industry

• Bain collaborated with Satmetrix and Fred Reichheld to develop Net Promoter Score (NPS), a metric that determines the likelihood of a firm’s customers recommending it to others The company has demonstrated strong performance through concrete results. It claims that its public clients have historically outperformed the stock market 4 to 1. High-profile examples of specific positive customer outcomes include the following:

• A European telecommunications provider used Bain’s services to improve its Net Promoter Score by 50 points, enabling it to increase acquisiton and decrease churn
• A leading pharmaceutical laboratory used Bain’s services to improve its supply chain, resulting in a 43% reduction in lead time, a 50% decrease in variability, and a 95% drop in risk of back-order
• An entertainment company used Bain’s services to develop a test and learning tool that led to a 500% growth in sales in pilot markets
• A technology firm used Bain’s services to simplify organizational structures, resulting in a 33% increase in customer-facing selling time and cost savings of more than $25 million
• Two large healthcare firms used Bain’s services during their merger, which resulted in the realization of net synergies 1.6 times the initial target within the first year of the integration The company has established a powerful brand as a result of its performance. It is one of the world’s leading management consulting firms, with 53 offices in 34 countries globally. It has more than 4,600 multinational corporation customers, including  most of the Global 500 and private equity funds representing 75% of global equity capital. It has many notable former and current employees, including former Massachusetts Governor Mitt Romney, former Hewlett-Packard CEO Meg Whitman, and American Express CEO Kenneth Chenault. Lastly, it has won many honors, including recognition as one of the “Best Places to Work“ by Glassdoor (2016), one of the “Vault Consulting 50“ (2016), and the #1 “Best Firm to Work for“ by *Consulting *magazine for 11 years in a row.

Channels

Bain’s main channel for acquiring customers is via the long-lasting customer relationships of their partners. The company promotes its offering through its social media pages and attendance of conferences.

Customer Relationships

Bain’s customer relationship is primarily of a dedicated personal assistance nature. Customers receive face-to-face assistance from company employees. That said, there is a self-service component. The company’s website features an “Insights” section with a number of self-help resources, including books, infographics, newsletters, videos, and other multimedia.

Key Activities

Bain’s business model entails creating and developing problem-solving solutions for its customers.

Key Partners

Bain maintains partnerships and affiliations with various organizations with the goal of solving many problems that may impact its clients. Specific partners include the following:

World Economic Forum – Engages world leaders in order to develop industry and global agendas

Endeavor – Supports high-impact entrepreneurs in order to stimulate long-term economic growth

Acumen – Invests in companies and leaders in order to combat global poverty

2041 – Hosts the International Antarctica Expedition, which promotes sustainability

Business 20 (B20) – Works with G20 governments in order to create jobs and drive economic growth

G(irls)20 – Gathers delegates from G20 countries to design solutions for female empowerment

International Business Leaders Advisory Council (IBLAC) – Gathers CEOs and Chairmen from leading global corporations to offer advice on issues and opportunities for Shanghai’s economic development

Key Resources

Bain’s main resources are its consultants, many of whom have deep expertise in specific industries.

Cost Structure

Bain has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of administration and customer support and operations.

Revenue Streams

Bain has one revenue stream, the fees charged to its clients for access to its services. These fees vary by individual project and type of client.