Boston Consulting Group

The Boston Consulting Group, Inc.
Private
Industry Management consulting
Founded 1963 (1963)
Founder Bruce Henderson
Headquarters Boston, Massachusetts, U.S.
Number of locations
 More than 90 offices[1]
Area served
 Worldwide
Key people
 Rich Lesser (President & CEO)
Revenue $6.3 billion (2017)[1]
Number of employees
 16,000 worldwide[1]
Website www.bcg.com

The Boston Consulting Group, Inc. (BCG) is an American multinational management consulting firm with more than 90 offices in 50 countries.[2] It advises clients in management decisions across private, public, and Nonprofit organization sectors around the world, including more than two-thirds of the Fortune 500, and is one of the 'Big Three' strategy consulting firms (MBB).[3] Considered one of the most prestigious management consulting firms in a branche-internal survey,[4] BCG was ranked fourth in Fortune's "100 Best Companies to Work For" in 2018.[5]

The firm was founded in 1963 by Bruce D. Henderson, a Vanderbilt University and Harvard Business School alumnus, who is also coined for suggesting the experience curve and growth-share matrix.[6] Growing from 249 consultants in 1980 to more than 16,000 consultants in 2018, BCG has helped establish many of the norms in business in the modern era.[7]

History

The company was founded by Bruce D. Henderson, a Vanderbilt University and Harvard Business School alumnus. After many years in the purchasing department of Westinghouse in Pittsburgh (where pricing behavior gave him the idea of the experience curve), he joined Arthur D. Little in Cambridge, Massachusetts. In 1963, he was recruited by The Boston Safe Deposit and Trust Company to form an internal consulting arm for the organisation.[8] He founded a one-man unit called the Management and Consulting Division.[7]

Henderson believed that in a competitive landscape in which larger and better-known consulting firms were present, BCG must carve out a distinctive identity by focussing on specialisation.[9] In 1966, BCG became the first Western strategy consulting firm to open an office in Japan.[10] It expanded in Europe in the 1970s, opening offices in London, Paris, Munich, and Milan.[11] In 1975, Henderson arranged an employee stock ownership plan to buy shares from The Boston Company, the parent corporation of The Boston Safe Deposit and Trust Company. The buyout of all shares was completed in 1979, making the firm fully owned by its employees.[10] When Henderson stepped down as president and CEO in 1980, BCG had seven offices and 249 consultants.[7] He stayed on as chairman until 1985, when he formally retired from BCG.[8]

In January 2013, Rich Lesser became the sixth president and chief executive officer of BCG.

In April 2015, the company launched BCG Henderson Institute in honor of its founder, Bruce D. Henderson, on his hundredth birthday.[12] The institute was ranked the third Best For Profit Global Think Tank by the University of Pennsylvania in January 2018.[13]

In June 2016, the Boston Business Journal reported BCG would be consolidating their two Boston offices and moving into a new 13-story, 370,000 square foot building on the city's South Boston Waterfront. The headquarters will be located at the site of the former Anthony's Pier 4 restaurant and it is due to be completed by June 2018.[14]

Awards and recognitions

BCG received the number 1 spot in Consulting Magazine's 2016 "Best Firms to Work for" ranking. [15] BCG also won this recognition in Consulting Magazine's 2014 "The Best Firms to Work For" ranking, in the edition released in September 2014.[16] Fortune Magazine ranked BCG second in its 2011- 2012 lists of the "top 100 best companies to work for".[17] The 2017 and 2016 rankings by Fortune listed BCG as the third "best company to work for."[18] and in 2015 BCG ranked second. BCG has also been listed in Consulting magazine's "Best Firms to Work For" list every year since 2001,[19] received a perfect score on the Corporate Equality Index[20] formulated by the Human Rights Campaign for the past six years,[21] and been rated by Working Mother magazine[22] as one of the "best companies" for working mothers for the past six years.[21]

Recruitment

BCG's recruiting process is notoriously demanding, typically taking candidates through computer-based examinations and multiple rounds of case and experience-based interviews. In 2013, career review site Glassdoor ranked BCG as the 3rd most difficult company with which to interview.[23]

Developed concepts

"Growth-share matrix"

BCG matrix of example data set

In 1969, BCG created the "growth-share matrix", a simple chart to assist large corporations in deciding how to allocate cash among their business units. The corporation would categorize its business units as "Stars", "Cash Cows", "Question Marks", and "Dogs" (originally "Pets"), and then allocate cash accordingly, moving money from "cash cows" toward "stars" and "question marks" that had higher market growth rates, and hence higher upside potential.[6][24][25]

Experience curve

The experience curve illustrates that the more often a task is performed the lower the cost of doing it will be. The task can be the production of any good or service. Each time cumulative volume doubles, value-added costs (including administration, marketing, distribution, and manufacturing) fall by a constant and predictable percentage.

BCG founder, Bruce Henderson, expounded the implications of the experience curve for strategy.[26] BCG research concluded that because relatively low cost of operations is a very powerful strategic advantage, firms should capitalize on these learning and experience effects.[27]

Advantage matrix

In this matrix, the two axes are economies of scale and differentiation. The four quadrants formed are called "Volume", "Stalemated", "Specialized", and "Fragmented".

Publications

Books

  • Martin Reeves, Knut Haanaes and Janmejaya Sinha: Your Strategy Needs a Strategy: How to Choose and Execute the Right Approach, 2015. ISBN 1625275862
  • Yves Morieux and Peter Tollman: Six Simple Rules: How to Manage Complexity without Getting Complicated, 2014. ISBN 1422190552
  • Luc de Brabandere and Alan Iny: Thinking in New Boxes: A New Paradigm for Business Creativity, 2013. ISBN 0812992954
  • Michael Deimler, Rich Lesser, David Rhodes, and Janmejaya Sinha: Own the Future: 50 Ways to Win from The Boston Consulting Group, 2013. ISBN 9781118591703
  • Michael J. Silverstein, Abheek Singhi, Carol Liao, and David Michael: The $10 Trillion Dollar Prize - Captivating the Newly Affluent in China and India, 2012. ISBN 1422187055
  • David Rhodes and Daniel Stelter: Accelerating Out of the Great Recession, 2010. ISBN 0071718141
  • Michael J. Silverstein and Kate Sayre. Women Want More: How to Capture Your Share of the World's Largest, Fast-Growing Market, 2009. ISBN 0061776416
  • Harold L. Sirkin, James W. Hemerling and Arindam K. Bhattacharya. Globality: Competing with Everyone from Everywhere for Everything, 2008. ISBN 0446178292
  • Carl W. Stern and Michael S. Deimler: The Boston Consulting Group on Strategy, 2006. A collection of articles on strategy and management. ISBN 0471757225
  • James P. Andrew and Harold L. Sirkin: Payback – Reaping the Rewards of Innovation Harvard Business School Press, 2006. ISBN 1422103137
  • Michael J. Silverstein with John Butman: Treasure Hunt – Inside the Mind of the New Consumer, 2006. ISBN 1591841232
  • Luc de Brabandere: The Forgotten Half of Change – Achieving Greater Creativity through Changes in Perception, 2005. ISBN 1419502751
  • Colin B. Carter and Jay W. Lorsch: Back to the Drawing Board – Designing Corporate Boards for a Complex World, 2004. ISBN 1578517761
  • Rob Lachenauer and George Stalk: Hardball – Are You Playing to Play or Playing to Win, 2004. ISBN 1591391679
  • Michael J. Silverstein and Neil Fiske: Trading Up – Why Consumers Want New Luxury Goods and How Companies Create Them, 2003. ISBN 1591840708
  • Jeanie Daniel Duck: The Change Monster – The Human Forces that Fuel or Foil Corporate Transformation and Change, 2002. ISBN 0609808818
  • Arun Maira: Shaping the Future – Leadership through Communities of Aspiration in India and Beyond, 2002. ISBN 0471479195
  • David C. Michael and Greg Sutherland: Asia's Digital Dividends – How Asia-Pacific's Corporations Can Create Value from E-Business, 2002. ISBN 0471479179
  • Tiha von Ghyczy, Bolko von Oetinger, and Christopher Bassford: Clausewitz on Strategy, Wiley 2001. ISBN 0471415138
  • Bolko Von Oetinger: A Passion for Ideas – How Innovators Create the New and Shape Our World, 2001. ISBN 1557532095
  • Philip Evans and Thomas S. Wurster: Blown to Bits – How the New Economics of Information Transforms Strategy, 1999. ISBN 087584877X
  • Carl W. Stern and George Stalk Jr. (eds.): Perspectives on Strategy from The Boston Consulting Group, 1998. ISBN 0471248339
  • George Stalk Jr. and Thomas M. Hout: Competing Against Time, 1990. ISBN 0743253418
  • James Abegglen and George Stalk: Kaisha, the Japanese Corporation, 1985. ISBN 0465037119
  • Bruce D. Henderson: The Logic of Business Strategy, 1984. ISBN 0890115265
  • Ira Magaziner and Tom Hout: Japanese Industrial Policy, 1980. ISBN 0877255156
  • Bruce D. Henderson: Henderson on Corporate Strategy, 1979. ISBN 0890115265

Perspectives

In 1964 BCG began mailing concise essays designed to stimulate senior management thinking on a range of business issues.[28] The pieces would be called Perspectives. Considered provocative ideas on business, BCG founder Bruce D. Henderson referred to them as "a punch between the eyes."[28]

Example Perspectives are:

  • "The Product Portfolio", 1970.[29][30]
  • "The Pricing Paradox", 1970.[29]
  • "The Rule of Three and Four", 1976.[31][32]
  • "Sustained Success", 1984.[33]
  • "Time-Based Results", 1993.[34]

Notable current and former employees

This is a non-exhaustive list of notable alumni of BCG.

See also

References

  1. 1 2 3 ""The Boston Consulting Group Hits $6.3 Billion in Sales"".
  2. ↑ "BCG offices". BCG. 2016. Retrieved 14 December 2016.
  3. ↑ "McKinsey, Bain and Boston Consulting Group. Which is best?". 24 September 2015.
  4. ↑ "Most prestigious consulting firms". Vault. 2016. Retrieved 14 December 2016.
  5. ↑ "100 Best Companies to Work For". Fortune. Fortune. 2018. Retrieved 7 May 2018.
  6. 1 2 The Product Portfolio, BCG, January 1970
  7. 1 2 3 "BCG.Perspectives - Bruce Henderson". BCG. Archived from the original on 14 April 2015. Retrieved 28 May 2018.
  8. 1 2 Hayes, Thomas C. (24 July 1992). "Bruce Henderson, 77, Consultant And Writer on Business Strategy". The New York Times. Retrieved 27 May 2018.
  9. ↑ "BCG History: 1965". BCG. Archived from the original on 17 August 2013. Retrieved 28 May 2018.
  10. 1 2 "The Boston Consulting Group". Vault. Retrieved 27 May 2018.
  11. ↑ "BCG Heritage – Our History of Shaping the Future". BCG. Retrieved 27 May 2018.
  12. ↑ "The Boston Consulting Group Launches Institute in Honor of Founder Bruce Henderson's 100th Birthday". Yahoo Finance. April 3, 2015. Retrieved 5 July 2018.
  13. ↑ "2017 Global Go To Think Tank Index Report".
  14. ↑ Harris, David L. (2016-06-27). "Boston Consulting Group will move hundreds of workers to Seaport". Boston Business Journal. Retrieved 2016-06-28.
  15. ↑ "Consulting Magazine - September 2016 - 16". www.consultingmag-digital.com.
  16. ↑ "Consulting Magazine - September 2014 - 1". www.consultingmag-digital.com.
  17. ↑ Fortune magazine, "100 Best Companies To Work For, 2011"
  18. ↑ "The Boston Consulting Group". Fortune.
  19. ↑ "Consulting Magazine,". Consultingmag.com. Retrieved 2012-02-11.
  20. ↑ "Human Rights Campaign Employer Database". Retrieved 2013-03-15.
  21. 1 2 "BCG Awards". Retrieved 2013-03-15.
  22. ↑ "Working Mother". Retrieved 2013-03-15.
  23. ↑ "Glassdoor's Top 25 Most Difficult Companies To Interview (2013) - Glassdoor Blog". 9 August 2013.
  24. ↑ The Experience Curve Reviewed BCG
  25. ↑ Fripp, Geoff.“Overview of the BCG Matrix” Guide to the BCG Matrix
  26. ↑ Hax, Arnoldo C.; Majluf, Nicolas S. (October 1982). "Competitive cost dynamics: the experience curve". Interfaces. 12 (5): 50–65. doi:10.1287/inte.12.5.50.
  27. ↑ Henderson, Bruce (1974). "The Experience Curve Reviewed: V. Price Stability" (PDF). Perspectives. The Boston Consulting Group. Archived from the original ([PDF] Reprint) on March 6, 2006. Retrieved March 24, 2007.
  28. 1 2 "BCG History Timeline". Retrieved 2013-03-08.
  29. 1 2 "BCG History Timeline". Retrieved 2013-03-08.
  30. ↑ "The Product Portfolio". Perspectives. The Boston Consulting Group. Retrieved 2013-03-08.
  31. ↑ "BCG History Timeline". Retrieved 2013-03-08.
  32. ↑ "The Rule of Three and Four". Perspectives. The Boston Consulting Group. Retrieved 2013-03-08.
  33. ↑ "BCG History Timeline". Retrieved 2013-03-08.
  34. ↑ "BCG History Timeline". Retrieved 2013-03-08.
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