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High Quality Consulting Group Company Analysis Case Study


Executive Summary

High Quality Consulting Group is a start-up company, planned to start operating in June 2014. The business will specialize in marketing high-tech products in Abu Dhabi and other cities within the UAE. The services will include consultancy on different types of projects, market study and top-notch retainer consultancy. The company’s principle investors and operators have extensive knowledge and experience in the consultancy business and international market research.

They are establishing the High Quality Consulting Group to make their services official to the public. The services offered will help their clients to expand channels of distribution and discover new opportunities. The company will be based in Hamdan Street, Abu Dhabi, United Arab Emirates. The business will be housed in the first floor of Khaleeg Towers, which is in the centre of the UAE’s high tech industry. The clients will range from major multinational corporations to medium-sized companies.

One of the company’s main challenges will be establishing itself as a leading consultancy firm in a very competitive market. The company faces different kinds of competition. The most important competition comes from the hi-tech companies that have established their own systems. Competition also comes from well established management consulting companies, for instance, High Tech Security Solutions, Aon Consulting, Arthur D. Little, Deloitte Consulting and PriceWaterhouseCoopers (PwC) among others.

These companies provide a wide range of services and do not focus on a particular market segment. In addition, some of them are frequently held back by defective organizational frameworks that do not offer the most qualified and experienced staff for various tasks. Competition will also come from various market research companies, for example, KPMG consulting and Monitor Group. High Quality Consulting Group will strive to enhance its competitive advantage in the industry by providing top-notch services.

In addition, the market studies will be integrated with the clients’ objectives. In the future, the company will expand its business to other continents and increase its product range. The company’s primary target will be large manufacturing companies. The secondary target will be medium-sized companies dealing in high tech products. High Quality Consulting Group will be priced at the upper end of what the market can afford. This will match the general positioning of the High Quality Consulting Group.

The company will position itself as an exceptional service provider. Sales revenue in the first year is projected at around 160,000 AED. The revenue is expected to go up to 290,000 AED by the third year. High Quality Consulting Group will be managed by working partners. The number will be around 3-5 partners in the beginning.

The company expects to make a return of roughly 60,000 AED by the end of third year, with a margin of about 7 percent. The company will be financed for start-up through a combination of short-term and long-term loan. The current loan will be roughly 130,000 AED, while long-term loan will be 50,000 AED. The latter will be invested in long-term assets.

Company’s Goals

High Quality Consulting Group goals include: individual goals, marketing objectives, business goals and customer satisfaction goals. Individual satisfaction goal entails minimizing the time spent on the business by the proprietors and attainment of professional accreditation. The core marketing objective is the generation of massive numbers of leads and media coverage. High Quality Consulting Group’s business objective is to increase sales substantially over the next three years.

Sales are projected at around 592,000 AED in the first year and 1000,000 AED in the third year. The gross margin is expected to be over 70 percent. In addition, the company expects to attain a net income of more than 5 percent of sales in the third year. Last but not least, the company aims to attain a high level of client satisfaction.

Company’s mission

High Quality Consulting Group will provide a consistent and first-class alternative to internal systems. The company will also help clients to expand their market and enhance their distribution channels. The company’s operators provide a high level of practical experience and expertise. The services will be offered in a more professional and less risky manner. Lastly, High Quality Consulting Group will also espouse financial balance, price their services at the upper edge, and provide higher quality services to the clients.

Keys to company’s success

  1. Ensuring utmost confidentiality, reliability, professionalism and keeping promises.
  2. Having a vision to generate fresh leads in the business.
  3. Diversifying business

Company summary

High Quality Consulting Group is a start-up company based in Hamdan Street, Abu Dhabi, United Arab Emirates. The company will specialize in marketing high-tech products in Abu Dhabi and other cities within the UAE. The services will include consultancy on different types of projects, market study and top-notch retainer consultancy. The company fits the needs of businesses dealing with the increasing agony of hiring staff and expanding operations.

The company will offer attractive prices, both compared to the market and the cost of establishing in-house system. In addition, the company will offer very flexible and scalable services to the existing and prospective clients. High Quality Consulting Group will make the project-based consulting and market research the core of the company’s business and a source for referrals for other consultancy services.

Company Ownership

High Quality Consulting Group will be created as a high-tech consultant company, based in Hamdan Street, Abu Dhabi, United Arab Emirates. The company’s ownership is under the main investors and operators. The company has not been registered so far and is still pondering on whether to be registered as public limited company or private company.

Start-up Précis

The total start-up expenses will amount to 18,000 AED. These will include legal fees, the cost of designing company’s emblem, office supplies and other associated costs. The required start-up assets will cost 31,000 AED. More details are shown in the table below.

Table: Start-up summary

Start –up Expenses Cost in AED
Legal
Stationery
Brochures
Consultants
Equipments
Other
1000
3000
5000
6000
2500
500
Total Start-up expenses 18000
Start-up Assets Needed Cost in AED
Cash Balance on Starting Date
Other Current Assets
25000
6000
Total Current Assets 31000
Cost in AED
Long-term Assets 0
Total Assets 31000
Total Requirements 49000

Table: Funding

Investment Cost in AED
Investor 1
Investor 2
Other
20000
20000
9000
Total Investment 49000

Table: Current liabilities

Accounts Payable
Current Borrowing
Other Current Liabilities
500
0
0
Current liabilities 500
Long-term liabilities 0
Total liabilities 500

Table: Loss at Start-up 0

Total Capital 17500
Total Capital and Liabilities 18000

Services

High Quality Consulting Group will provide the expertise needed to expand channels of distribution and explore new opportunities. This can be described as consultancy on different types of projects, market study and top-notch retainer consultancy. Retainer consultancy entails carrying out business development and market development operations on behalf of the client. This requires the company to fully understand the client’s condition, goals and limitations. It also involves confidential representation of clients in various meetings.

On the other hand, project-based consulting entails developing and/or implementing specific plans, using expertise to solve particular challenges, and compiling important information on behalf of the client. Lastly, market research involves conducting market studies on behalf of the client. The study may be on a particular market segment, distribution channels, or a specific subject. For example, the company may conduct a study on consumer behaviour in a given market segment or impact of changing margins on the client’s products.

Competition

The company faces different kinds of competition. The most important competition comes from the hi-tech companies that have established their own systems. These companies have workers who carry out the above mentioned functions as part of their routine.

The advantage the High Quality Consulting Group has over such businesses is that most of their workers are already overburdened with responsibilities. As a result, they cannot perform these functions effectively. High Quality Consulting Group can also approach the new partners and other stakeholders in a confidential manner. In addition, they can collect information and make preliminary contacts in a manner that most of the corporate employees can’t.

Competition also comes from high-level management consultancy firms, for instance, High Tech Security Solutions, Aon Consulting, Arthur D. Little, and McKinsey among others. These are basically generalists who offer wide range of services and do not focus on a particular market segment. In addition, some of them are frequently held back by unsound organizational framework that doesn’t offer the most qualified and knowledgeable personnel for various tasks.

High Quality Consulting Group will have a competitive advantage over these companies because its operators are experts in their own fields and will provide top-notch services. The third competition is multinational corporations that specialize in market research, for instance, KPMG consulting, Deloitte consulting and PriceWaterhouseCoopers (PwC).

These are very strong competitors. However, High Quality Consulting Group will match them by providing the required expertise and top-notch services to the clients. Last but not the least, competition will also come from smaller companies that are market-specific1.

Discharge

The key services will be offered by the company’s principals. The core value of the company is professionalism, offered through a blend of experience, diligence and training. The company will also engage freelance experts for back-up in research and report development. These are areas that the principles can delegate without compromising the company’s principle value (professional expertise).

Technology to be used

High Quality Consulting Group will use the most recent Windows and Macintosh. The capabilities of the two technologies include: wide-ranging web facilities for delivery drafts and other information, ample presentation facilities for organizing and sending multimedia messages and presentation, and ample desktop distribution facilities for delivering regular reports and research materials.

Prospective services

In the future, the High Quality Consulting Group expects to expand its services to other continents and increase its product range. The future services will incorporate electronic newsletter services and technology integration.

Market Opportunity

High Quality Consulting Group will focus on high-tech producers, who want to sell their products in the local and international local. The clients will range from major multinational corporations to medium-sized companies. The company’s most significant group of prospective client are managers of huge companies.

They include sales executives, general managers and marketing executives. These managers are always in charge of specific market segments, channels of distribution and global spotlight. Their schedule is extremely tight. Hence, time and resource management are always on top of their priority. In addition, when exploring new opportunities, they must be very cautious not to put their company in massive risks.

Market Segmentation

As already been mentioned, the market will be divided into two: large manufacturing companies and medium-sized companies. Large manufacturing companies are the most significant market segment. They include large multinational corporations, for example, Samsung Gulf Electronics, Etisalat, Thuraya Satellite Telecommunications and Gulf Electronics Company. High Quality Consulting Group will carry out development functions on behalf of these companies better than they would manage on their own.

On the other hand, medium sized companies include multimedia and software firms. They also include companies in the high growing sectors. These companies are Emaar Properties, Jumeirah Group, Emirates Integrated Telecommunications Company and Wardi Telecom among others. High Quality Consulting Group will provide specialized development alternative to these companies to enable them to explore new opportunities2.

Market Analysis Pie Chart
Market Analysis Pie Chart

Table: Market Analysis

Market Analysis Potential Clients Growth 2014 2015 2016 CAGR
Abu Dhabi High Tech
Dubai High Tech
Others
35%
20%
7%
2000
1400
600
2500
1550
642
3050
1749
824
10%
15%
5%
Total 6.27 6..27

As shown in the table above, the focus will be on the above chosen potential clients in Abu Dhabi, Dubai and Other cities in the United Arab Emirates. The above chosen high tech manufacturing and multimedia companies are the principal clients of the High Quality Consulting Group.

Generally, the UAE’s consulting industry is made up of a small number of consulting companies and large number of private consultants. In other words, the industry is pulverized and messy. The participants range from a small number of large multinational corporations to a huge number of private consultants. Therefore, one of the challenges High Quality Consulting Group will face is how to establish itself in this pulverized and disorganized industry3.

The industry is dominated by a few large consulting companies. Most of these companies have been formed through partnership and their service cuts across the globe. They have regional subsidiaries that are interlinked through directors and share common objective. The companies include Aon Consulting, Arthur D. Little, Deloitte Consulting and PriceWaterhouseCoopers (PwC) among others. These companies charge exceptionally high fee for their services.

In addition, they have a relatively high administrative and maintenance expenses. The proprietors are responsible for promoting the products and attracting clients, while the junior employees carry out the technical tasks. At the middle level are consultants who perform specific functions or operate within a specific market, for instance, market research companies. Lastly, at the lower level are the individual consultants who are more like contract experts. They can be contracted temporarily for consultancy services4.

Financial Data

The following table shows the projected growth in sales in the next three years. The figures are in the United Emirates Dirham (AED).

The projected growth in sales in the next three years

Projected Profit and Loss

The table in appendix 2 shows the annual estimates. Sales are expected to rise from 590,000 AED in the first year to about 1000,000 AED in the third year, while direct costs of sale from 160,000 AED to 290,000 AED. On the other hand, the gross margins are expected to remain at around 70%. Last but not the least, net profit is expected to increase to approximately 7%.

Projected Cash Flow

Cash flow projection is very important in any start-up business. The yearly cash flow figures are shown in the table in Appendix 3. Cash Receivables are projected to rise from 570000 AED to more than 1000,000 AED. On the other hand, expenditure is projected to rise from 560,000 AED to about 950,000 AED.

Projected Balance Sheet

The balance sheet in appendix 4 indicates that the company will have more assets than liabilities. In other words, High Quality Consulting Group will be in a strong financial position. The figures shown are annual estimates. The company’s assets are expected to rise from 145,000 AED to over 350,000 AED. On the other hand, the liabilities are projected to rise from 110,000 AED to 225000 AED. Last but not the least, capital is expected to increase from approximately 34,000 AED to over 90,000 AED.

Environmental and Industrial Analysis

Generally, the consultancy services fit very well with the existing and new businesses. The industry is fairly stable since there are numerous individuals starting their own businesses and looking for assistance to manage their business and market development plans. The industry is also highly concentrated. It has numerous medium-sized consulting companies and thousands of individual consultants.

Given the large number of high-tech manufacturers and multimedia companies in the United Arab Emirates, consulting services are in high demand. However, most companies offering these services cannot match the experience and expertise of the High Quality Consulting Group5.

The political state of affairs in the United Arab Emirates (UAE), particularly in Abu Dhabi can be described as stable at the moment. The main focus of the current government is economic growth and attainment of the first world status.

Therefore, the UAE government provides the most conducive environment for doing business. The policies are very friendly, with limited bureaucracy. In addition, the global economic crisis that swept most countries had limited impact on the UAE’s economy. As a matter of fact, the UAE is one of the leading economies in the Gulf region6.

However, the main hurdle the company could face is exporting its services in the region and the rest of the globe. Full integration of the Gulf economies has not yet been realized. The integration was aimed at enhancing the customs union and implementing common market. This is partly attributed to the political rivalry among some Gulf States, for instance, Saudi Arabia and Qatar. As a result, doing business in the region is relatively very difficult7.

The low number of skilled personnel in the country has increased demand for consultancy services over the past few years. Lack of enough qualified personnel in the labour market has made the development of in-house systems very difficult and expensive. As a result, a number of businesses have opted for other cost-cutting measures. These measures include outsourcing some services8.

SWOT Analysis

SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. SWOT analysis is commonly used in business studies to explore the existing conditions in order to come up with possible solutions or strategies of addressing both internal and external challenges. Strength and weaknesses explore factors within an organization, whereas opportunities and threats look at the external environment. In this case, SWOT analysis will be used to audit the target market.

The long-term experience of the operators in the consulting business and international market research gives the company a competitive edge in the industry. The principal’s eminence in the industry will facilitate marketing of the company’s services, despite the high prices charged. In addition, the operators have been undergoing constant training to get updated with the current trends of consultancy in different types of projects, market studies and top-notch retainer consultancy.

As a result, the company is able to provide high quality and reliable services to its clients. The company’s major weakness is attributed to its low status and inadequate publicity. The company still has a low contact network. Even though the company aims to explore the social media to increase network coverage, it is still not sufficient to attain a high number of clients.

It also focuses on high-tech markets and products alone, which limits its market. In addition, the fee charged is very high. Lastly, most operations will be carried out by junior employees, although publicity will be done by the partners and senior operators.

The company’s opportunities depend on advertisement of high quality project-based consultancy, market research and top-notch retainer consultancy services on the social media and print press. The company can enhance its network contact and market its services online by simply creating a Facebook and Twitter profile. This will create an additional value for the customers. The company can also increase its client base by offering competitive prices.

Last but not least, the High Quality Consulting Group’s major threat is the high number of companies within the target market offering similar services. As a result, competition is very stiff. Other threats include global economic recession and unhealthy competition from the well established companies like PricewaterhouseCoopers (PwC). The large companies charging fairly uncompetitive prices are hurting small and medium-sized companies with low volume capacity.

Porter’s Fives Forces Analysis

This theory is based on a comprehensive outlook of the company’s policies that are in line with the prospects and dangers within and without the industry. The five forces as identified by porters include: obstacles to prospective participants, bargaining power of the stakeholders, threat of alternative products, and the competition within the industry. Porter’s five forces analysis not only offers a significant foundation for strategic analysis, but also examines the viability of the industry to come up with possible course of actions9.

The consulting industry is regarded as a distinct industry. As a result, the Porter’s five forces and other externalities have considerable impact on the individual companies. Globally, the industry is regarded as one of the market leaders because of its outstanding service delivery and distinguished brands.

However, over the recent past, the industry has been faced with stiff competition, both within and without the country. For that reason, industry analysis is very crucial for the company in order to cope with the current and prospective challenges10.

The ease of entry into a market dictates the level of competition. The threat of entry significantly depends on the barriers put in place to ward off the new entrants. There are a few large consultancy corporations that control the largest share of the UAE market to a near monopoly. As a result, smaller operators have always found it very difficult to access this market. Nevertheless, the transformation of the industry and the state of the economy has attracted new entrants into the market.

Customer’s bargaining power in the UAE’s consultancy industry is very high. This is due to the fact that clients have numerous options to choose from. Therefore, the High Quality Consulting Group needs to focus more on consumer satisfaction and provision of exceptional services. The power of the supplier in the industry is also important and has significant impact on the company’s competitive capacity. For this reason, a number of companies have established strong ties with its suppliers and other complementary companies.

The industry also has highest threat of substitutes, especially given the high number of players within the industry. In addition, most of the services provided can be done by the clients themselves. The threat increased with the entry of individual consultants who are more like contract experts. Therefore, High Quality Consulting Group must take notice of the threats within its market segment. Lastly, the level of competition among small and medium-sized companies is very high.

The competition has become stiff due to numerous medium-sized consulting companies and thousands of individual consultants. The small and medium-sized companies not only face competition from their counterparts, but also from large consulting companies that have nearly monopolized the industry. Nevertheless, High Quality Consulting Group will be able to maintain a competitive edge over their rivals by improving its apparatus, increasing the market share, offering excellent services and promoting their brand11.

Operational Plan

As already been mentioned, the company will offer various services which include consultancy on different types of projects, market study and top-notch retainer consultancy. Discretionary services will also be offered upon client’s request. For this reason, the company will try to be as flexible as possible.

In case a customer is not fully satisfied, remedial services will be provided. The targeted areas for sales will be Abu Dhabi, Dubai and other cities in the UAE. The company will focus on large high-tech and medium-sized manufacturing companies in the United Arab Emirates.

The services will be offered based on the schedule created, with priority given to project-based consulting and market research. The schedule will be adjusted from time to time depending on the magnitude of work available and many other factors. The company will use all the available resources to increase its clientele and probably expand its area of operation. Since there are very many players in the industry, the company will seek long-term partnership with its clients.

The business will be housed in the first floor of Khaleeg Towers, which is in the centre of the UAE’s high tech industry. The office has adequate space to host a professional and well organized operation and will be equipped with the required facilities. The facilities will include stationeries, computers and other equipments (for example, printers, scanners, mobile phones, refrigerators and many more). Communication within the company will be affected through face to face conversations and mobile phones.

On the other hand, communication with the clients will be through convenient means, for instance, phone calls, face to face interactions and e-mails among other channels. The key services will be rendered by the company’s principals. The company will also engage freelance experts for back-up in research and report development.

Risk Management

Some of the risks that may be encountered in the industry include property damage, injury to the staff, theft, vandalism, poor workmanship and fire among others. Some of these risks are due to laxity or unawareness. Therefore, exceptional work ethics and extensive training are required. For this reason, the company will invest in workers’ training.

Both formal and informal training will be applied. Formal training will involve sponsoring employees to take certain relevant courses. On the other hand, informal training will entail giving out instructions during work. Informal training will be important because of the principals’ extensive knowledge and experience in the consultancy business and international market research.

Management Team

The initial team will comprise of the principals themselves, with very little back-up from other freelance experts. In other words, the organizational structure will be very flat. As the company grows, extra help will be required, especially in sales and marketing. Employees will be required to have a high level of experience and expertise in project-based consultancy, market research and other areas of service. The current personnel plan is still provisional.

It will entail 3-5 principals, office manager, office assistant, editorial/graphic person, and a marketer. Additional employees will be required as the company grows. The company expects to increase the number of employees from 14 in the first year to 20 in the third year. The majority will include sales people, editorial/graphic persons and secretaries. The table in appendix 1 shows the company’s personnel plan.

Benefits to Community

First, the company will benefit high-tech manufacturing companies within and outside Abu Dhabi. The High Quality Consulting Group’s services will enable the managers of these companies to focus on other important areas. Second, the company will enhance the economy of the area by providing jobs to those who are not employed, provide government revenues in the form of taxes, and increases market for the client’s products.

Bibliography

PKF, Doing Business in United Arab Emirates. Business and Tax Profile, PKF, Inc., Abu Dhabi, UAE, 2012.

Nonneman, G, EU-GCC Relations: Dynamics, Patterns & Prespectives, Gulf Research Centre, Dubai, UAE, 2006.

Porter, ME, Competitive strategy: Techniques for analyzing industries and competitors, Free Press, New York, 1980.

UNCTAD, Management Consulting: A Survey of the Industry and Its Largest Firms, United Nations conferences on Trade and Development, New York, 1993.

Footnotes

1 UNCTAD, Management Consulting: A Survey of the Industry and Its Largest Firms, United Nations conferences on Trade and Development, New York, 1993, p. 12.

2 UNCTAD, p. 15.

3 Ibid.

4 UNCTAD, p. 20.

5 PKF, Doing Business in United Arab Emirates. Business and Tax Profile, PKF, Inc., Abu Dhabi, UAE, 2012, p. 19.

6 PKF, P. 22.

7 G, Nonneman, EU-GCC Relations: Dynamics, Patterns & Prespectives, Gulf Research Centre, Dubai, UAE, 2006, p.35.

8 Ibid.

9 ME, Porter, Competitive strategy: Techniques for analyzing industries and competitors, Free Press, New York, 1980, p. 5.

10 Ibid.

11 Porter, p. 12.

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Z., L. (2020, April 1). High Quality Consulting Group Company Analysis [Blog post]. Retrieved from https://ivypanda.com/essays/high-quality-consulting-group-company-analysis/

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Z., Lilah. "High Quality Consulting Group Company Analysis." IvyPanda, 1 Apr. 2020, ivypanda.com/essays/high-quality-consulting-group-company-analysis/.

1. Lilah Z. "High Quality Consulting Group Company Analysis." IvyPanda (blog), April 1, 2020. https://ivypanda.com/essays/high-quality-consulting-group-company-analysis/.


Bibliography


Z., Lilah. "High Quality Consulting Group Company Analysis." IvyPanda (blog), April 1, 2020. https://ivypanda.com/essays/high-quality-consulting-group-company-analysis/.

References

Z., Lilah. 2020. "High Quality Consulting Group Company Analysis." IvyPanda (blog), April 1, 2020. https://ivypanda.com/essays/high-quality-consulting-group-company-analysis/.

References

Z., L. (2020) 'High Quality Consulting Group Company Analysis'. IvyPanda, 1 April.

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