How Knowledge Accumulation Changed the Competitive Advantage of Strategy Consulting Firms
21 Pages Posted: 26 Aug 2006
Date Written: October 2005 5,
Research evidence confirms that the accumulation of knowledge contributes to the competitive advantage of firms. In the strategy consulting industry, one of the most knowledge-intensive professional services industries, however, established firms thatexploited their knowledge accumulation by adding exploitative consulting practices have found their performance has deteriorated. To investigate this phenomenon, this paper willdescribe how the increasing share of exploitative practices in the strategy consulting industryhas attracted both established ICT-related consulting firms and new entrants, and enabled clients to expand their problem-solving abilities. We will argue that these developments in terms of competitiveness and client competencies have reduced the attractiveness of exploitative practices for established strategy consulting firms. To analyse thesedevelopments and to provide strategic options for the established strategy consulting firms, a conceptual framework will be proposed. Based on this framework, three strategic option are identified: ‘Follow the herd’, ‘Become ambidextrous’ and ‘Back to the original focus.’ In summarizing our argument, we highlight the pros and cons of these options and the implications for top management.
Keywords: strategy consulting, knowledge, exploitation and exploration, ambidextrous organization
JEL Classification: D21, L20, M
Suggested Citation: Suggested Citation