Strategic planning

Over the last 18 months, I (along with many other consultants) have worn out several pairs of shoes walking the pavements searching for clients. In 20 years the consulting market hasn’t been worse. And with the majority of companies under severe cost pressure, credit still tight and high and growing unemployment, a fair degree of optimism is required even to describe any recovery during 2009 as ‘tentative’. Even the politicians have finally broken cover and are now talking about a decade of austerity.

One of the points often made about the consulting industry is that barriers to entry are low.  But this isn't strictly true.  They're low in theory (there's no regulation to keep new entrants out, for example) but history suggests they're high in practice.  Over the last 30 years there are remarkably few firms which have entered the market and achieved sustainable growth.

Why is it so difficult for small firms to become mid-sized firms, and for mid-sized firms to become large ones?

It's been widely reported that Volvo trucks suffered a potentially catastrophic fall in demand in the third quarter of 2008: from around 40,000 trucks a month, sales fell to around 100. Clearly, the owners of big fleets of trucks are trying to save money by running their vehicles for longer.