Businessmodel of Boston Consulting Group

Customer Segments

BCG has a mass market business model, with little differentiation between customers. The company targets its offerings at firms of all sizes and industries seeking management consulting services.

Value Proposition

BCG offers four primary value propositions: convenience, customization, performance, and brand/status.

The company creates convenience by offering a three-step program for client enablement. The process involves a) identifying the capabilities necessary to win, b) developing better managers by providing them with a mix of managerial and technical skills, and c) developing next-level business platforms to maximize manager effectiveness. The program can be applied across industries.

The company offers customization through the second step of its enablement program. It develops programs with a curriculum tailored for specific managers and cohorts. For example, its “lean curriculum” has 24 modules, which are used in different combinations for different cohorts.

The company has demonstrated strong performance through tangible client results. High-profile examples of these outcomes include the following:

• An industrial engineering conglomerate used BCG’s enablement program to obtain more than $25 million worth of positive results (e.g., savings)
• A rolling stock manufacturer used BCG’s lean transformation program to decrease lead times by 70% and increase productivity by 30%
• A government agency used a new BCG operating model to increase productivity by 15%
• A pest control company used BCG’s pricing and infrastructure improvement program to drive bottom-line improvements of over 250 basis points annually
• A building products company used BCG’s lean manufacturing program to create bottom-line improvements worth over $100 million within two years The company has established a strong brand as a result of its success. It is one of the world’s top management consulting firms, operating 85 offices in 48 countries. Its clients include over two-thirds of the Fortune 500. Lastly, it has won many honors, including recognition as one of the “World’s Best Outsourcing Advisors” by IAOP (2016), as one of the “Best Firms to Work For” by Consulting magazine (2015), and as one of the top three consulting firms by Vault for three years in a row.

Channels

BCG’s main channel are its partners that acquire new consulting projects. The company promotes its offering through its social media pages and attendance at conferences.

Customer Relationships

BCG’s customer relationship is primarily of a dedicated personal assistance nature. Customers work directly with staff members to implement solutions. That said, there is a self-service component. The company’s website features self-help resources such as articles and research reports.

Key Activities

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

Key Partners

BCG maintains the following partnership programs:

BrightHouse – The company partners with this firm, billed as the world’s first ideation company, to help clients become more purpose-driven to increase employee engagement and customer loyalty.

BCG Digital Ventures – The company works with business leaders and investment communities to quickly develop and introduce transformational digital platforms, products, and businesses.

Key Resources

BCG’s main resources are its human resources. Beyond its traditional consulting staff, it maintains the following key groups of employees:

BCG Gamma – Consists of world-class business consultants and data scientists who specialize in advanced analytics, utilizing computer science, machine learning, artificial intelligence, and statistics. Team members operate from BCG’s North American, Asian, and European hubs.

Centers of Excellence – Consist of specialist coaches and consultants who utilize proprietary resources and tools and design certification programs for clients. There are seven centers total.

Cost Structure

BCG 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 research/development and customer support/operations, both fixed costs.

Revenue Streams

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