MBAs, Consulting, Competitive Strategy

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Consulting

• alumni from the elite 3 consultancies (McKinsey, Bain, Boston Consulting Group) run some of the world's largest businesses (Alphabet, Coca-Cola); Source: The Economist

• companies which hire strategy consultants experience a significant and lasting productivity improvement vs. those that don't; companies run by former consultants (since January 2010 - 2025) have generated a cumulative return for shareholders of +677% (including dividends) vs. 584% from S&P 500 benchmark index; Source: The Economist and The Economist

• some problems that consulting firms can address: up-skilling employees, employee turnover resulting from return-to-office mandates, mass layoffs, pullback on DEI initiatives, new sustainability regulations; Source: Forbes

• the Big 4 professional services firms (accounting and consulting): Deloitte, PwC, EY, and KPMG; revenue from consulting can fluctuate with the economy vs. auditing which is required for public companies; Source: Wall Street Journal and Financial Times and Business Insider

  • offer companies services such as workforce transformations, reshaping corporate finance portfolios, assurance, valuation, and optimizing technology use; Source: Business Insider 

• MBB/The Big Three: top 3 strategy and management consulting firms are: McKinsey, Boston Consulting Group, and Bain; consulting sector has global revenue of $860 billion and U.S revenue of $94 billion (2023); Source: Bloomberg and Business Insider and Business Insider

  • offer expertise in business strategy and solving complex problems: mergers & acquisitions, budgeting, cutting costs

  • less than 1% acceptance rates for these firms; Source: Business Insider

  • 2023: McKinsey & Company (oldest and most prestigious): $16 billion revenue, BCG: $12 billion revenue, Bain: $6 billion revenue; Source: Business Insider

• consulting: strategy industry is worth $250 billion; the value of strategy is obvious to every company; McKinsey made around $10 billion in 2018, BCG around $7.5 billion, and Bain and Company around $4.5 billion; when the client-consultant relationship is functioning at its best, the consultant gives the client: information (the data and analyses that take the client’s world, industry, and market position and make sense of it), expertise (an experienced operator’s perspective on a problem and the different ways that it can be solved), insight (the rigorous, analytical application of expertise to come up with insights that will help the company succeed), and execution (the roadmap to choosing and implementing the changes to be made); Source: CB Insights 

• the 3 largest management consultancies are McKinsey, Boston Consulting Group, and Bain; Source: CB Insights 

• Big 3 Consulting firms (MBB): McKinsey, BCG, and Bain: the world’s 3 most prestigious strategy consulting firms; (1) McKinsey: many of the company’s alumnus have gone on to be CEOs of major corporations and the firm is sometimes dubbed the “CEO factory”; (2) Boston Consulting Group; (3) Bain & Company; Source: IGotAnOffer 

Competitive Strategy

• there are 6 main strategies that companies can use to enter international markets: (1) exporting; (2) turnkey projects (where the contractor handles every detail of a foreign client’s project and then grants control to the foreign client upon completion of this project); (3) licensing; (4) franchising; (5) joint ventures; and (6) wholly owned subsidiaries; Source: International Business: Competing in the Global Marketplace 

•  Horizontal Integration is when several divisions produce the same or related products; Vertical Integration is when firms have upstream divisions that produce components that downstream divisions use to produce the final products; Source: Microeconomics 

• the 9 elements of Change Power (the capacity of an organization to adapt): leading change (purpose, connection, and direction); organizing for change (development, flexibility, and action), and teaming for change (capacity, scaling, and choreography); Source: Bain 

• in order to possess sustainable competitive advantage, a company needs to have a strong position (offense) in the market and effective protection from rivals (defense) in the market; this is ultimately captured/measured by superior profitability; to have a good offense: the value of the product to the customer has to significantly exceed the price of the product and the price of the product has to significantly outweigh its cost; a company’s market position can be defended by generating high rates of customer retention (for example, by having high switching costs) and ensuring low competition (preventing imitation by making product copying difficult and expensive and keeping the costs of market entry high); Source: Modern Competitive Strategy 

• a firm can have any of the following returns to scale: Increasing Returns to Scale: output more than doubles when all inputs are doubled; Constant Returns to Scale: output exactly doubles when all inputs are doubled; and Decreasing Returns to Scale: output less than doubles when all inputs are doubled; Source: Microeconomics 

• Economies of Scale is a doubling of output achieved by a less than doubling of cost; Economies of Scope occurs when joint output of a single firm is greater than the output that could result from 2 different firms each producing a single product; Source: Microeconomics 

• a SWOT analysis in business refers to assessing an organization’s strengths, weaknesses, opportunities, and threats; Source: Understanding Business 

MBAs

• Out-of-pocket expenses ($131,303 median); earnings 1-year at job ($85,749); Source: Bloomberg

• ROI (the salary obtained from a job once graduating compared to the cost of the program); Source: Investopedia 

• traditional 2-year MBA from highly ranked school: $200,000+ (living expenses, tuition, fees; Source: WSJ