PwC purchases Booz & Co globally - thoughts?

Question

https://dealbook.nytimes.com/2013/10/30/ ... ting-firm/ I think it really shows how necessary it is for the traditional strat firms to move into execution, to remain competitive.

brianlange77 · Answer

Two thoughts:

1. The Booz name has taken a hit b/c of the Snowden stuff.
2. As with many mergers post 2007-, this probably presents more cost-reduction upside than it does revenue-generation upside.

Just my $0.02.

-Brian

missxmelon · Answer

Interestingly enough, Accenture was in the running for purchasing Booz & Co, too. Obviously, the deal fell through. To me, it seems like the other way around; implementation firms are looking to expand into strategy.

hamm0 · Answer

Just want to point out that Snowden worked for Booz Allen Hamilton, which is not the same firm as Booz & Co. BAH and Booz split several years ago, and had/have separate owners. BAH focuses mainly on government contract work, while Booz tends to compete more in the strategy space.

brianlange77 · Answer

Either way -- it's symbolic of an economic period in which mergers happen for below the top-line efficiencies.... it's rarely about top-line growth.

method · Answer

I disagree with the cost-reduction point. This is a services industry in which the product is the people. This is not like merging two manufacturing companies and taking advantage of excess capacity or creating increased purchasing power via volume leverage. Furthermore, a lot of these firms appear to be fairly lean. Projects often have 1 or 2 analysts, consultants, and an EM. I'm not sure where you start to cut people without sacrificing serious quality or speed.

Consulting industry consolidation is much more about strategic positioning and synergies than it is operational efficiency. Strategy firms are reaching down into implementation, and implementation firms are reaching up into strategy. They still differentiate on a number of factors, but I think it's going to get harder and harder for most of the firms to compete without having some of both. Granted there are exceptions, but how long will they last? Even McKinsey is building technology platforms to sell to clients.

brianlange77 · Answer

Fair -- it's probably a bit of both. As lean as these companies are -- there are still two sets of 'inside function groups' here, right? HR, Finance, Ops, IT, etc. But also about being able to 'extend the sell.'

-Brian

PwC purchases Booz & Co globally - thoughts?

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