“Ed Booz believedpassionately that he could help companies succeed by bringing them a humantouch: expert, candid advice and an outside perspective on their businesses. Heinsisted that “people, not products” were the focus of work. And he knew thatplacing the right person in the right position with the right support wouldlead to better results than relying on any particular theory, method, or tool.”(Booz Allen). Management Consulting was developed on the concept thatorganizations and companies would further succeed if they could get expert,unbiased perspective for their problems from an external organization.
BoozAllen Hamilton was built on this concept by Edwin G. Booz in 1914 aftergraduating from Northwestern University. According to recent data, BAH employsapproximately 30,000 employees internationally and reported $5.8 billion infiscal 2017 with a stock market valuation of an estimated $3.3 billion.
Theyserve a wide variety of industries with an even diverse set of clients. Themajority of their clients are from vastly different industries such as Defense,Intelligence, Civil, and Global/Commercial finance, Healthcare, Strategies andLogistics development, Technology incorporation and Management Consultationservices (Booz Allen). Through engaging in diverse industries and organizationswhile successfully meeting their needs, BAH has cultivated talent and expertisein various avenues. Along with that, they have teams dedicated to strategicthinking that anticipate clients’ needs and develop solutions and novelimplementation methods resulting in long-lasting relations.
Through theirstrategic thinking and planning, BAH has improved organizations’ efficiency,transfigured healthcare, bolstered cyber defenses, tackled global terrorism,and effectively managed change.Booz AllenHamilton has been around for over a century and has managed to be one of thebest organizations in its industry. Times have changed, needs have changed, andmethods have changed and BAH evolved along with them. Not only did they evolvebut they have succeeded on a global level only becoming more prominent which isno small feat. They have employed strategic thinking by not solely envisioningthe future but the gap between existing reality and the intent for the future.BAH stayed ahead of their market and competitors by continuously shaping andre-shaping their clients’ strategies as needed.
By creating strategic thinkingteams, they had a holistic perspective that recognized how singular parts of anorganization influenced each other and developed the ability to customizesolutions to a particular organization and their specific requirements. Due tothat, they have consistently succeeded nationally and internationally. Afterlearning about the importance of strategy and implementation and how the mostsuccessful organization can fade without proper strategic thinking andplanning, I wanted to examine what and how they have done it. Another factorthat contributed to picking this particular organization is my potential careerpath in Strategic/Management Consulting industry. Strategic Analysis To analyze BoozAllen Hamilton’s strategic success, it’s essential to conduct a thoroughinternal and external analysis. An internal analysis is conducted in anorganization to discover and assess particular characteristics, capabilities,resources, and core competencies while also conducting a gap analysis. Thepurpose of a gap analysis is to determine what tools and resources need to beutilized in order to move forward from current performance to targetperformance. An external analysis examines the environmental factors, newopportunities, and threats that could potentially affect the organization butare out of their control.
Together, they aid an organization to take advantageof their strengths and curtail their weaknesses. A SWOT analysis and a PESTELframework are two tools often used to evaluate an organization’s internal andexternal environment. AsBooz Allen Hamilton maintains its position as one of the frontrunners of itsindustry, analyzing its strengths, weaknesses, opportunities, and threats willprovide an insight into its existing business environment. Strong brand portfolio is something BAH hasinvested in and is one of their biggest strengths. Because of their extensivebrand portfolio, they have been able to develop an extensive product portfolio expandingtheir reach into a multitude of industries. Financial Crimes & Anti-Money Laundering,Virtual Cloud Defense, Cyber4Sight are just a few of their products that havecontributed to BAH’s overall growth strategy. For example, BAH advertisesCyber4Sight as “delivers customers the comfort of knowing that ourcomprehensive and context-rich threat intelligence enables them with everythingthey need to prioritize strategic security decisions and to detect, understand,and mitigate risks.” (Booz Allen).
Through their diversified productsand managed services offerings, they have cultivated a wide customer baseensuring a consistent growth rate. One of their biggest clients is the Americangovernment and they have secured strong relations with Federal Aviation Administration,IRS, and the Department of Defense. Along with having a highly reputable andwide-arching client list nationally, they also have 72 offices internationallyin 4 continents. BAH also has a highlyskilled and motivated workforce that they have developed through successfultraining and learning programs (Fernfort University). They invested a vastamount of resources in development and training programs ensuring they have ahighly skilled workforce to take on problems regardless of the industry. They havealso created teams in their new Strategic Innovation center dedicated tospecific topics such as cyber threats, artificial intelligence, digital solutions,homeland security to develop solutions and insights.
When asked about the purposeof it, they said “Among its areas of focus? Developing predictive intelligenceservices that include anticipatory cyber threat solutions, protection, anddetection capabilities and the application of social media analytics designedto provide early identification of trends that would otherwise not be possibleusing after-the-fact analysis of traditional data sources.” (Washington Post) In order to maximize strengths and minimizeweaknesses, it’s essential to address both sides of the equation. Even thoughBAH has a wide product portfolio, they have gaps in the product range whichcauses a lack of choice forcing the client towards a competitor to better meettheir needs. Another significant weakness lies in the R&D department. Inthe current market, organizations are allocating the majority of their spendingin their research and development departments because they realize theimportance of “investing in new technology and future capabilities which istransformed into new product, processes, and services. (Incremental Innov.)”.
BAH’sR spending is below the investment average of their biggest competitorseven though it’s above the industry average. Due to that, they can’t competewith their top competitors when it comes to innovation therefore falling behindon new product and services offerings. Alongwith Booz Allen Hamilton’s strengths and weaknesses, analyzing their opportunitiesand threats are essential to get an accurate strategic analysis. Even thoughthe American government and their federal agencies are their biggest customers,they can enhance their business with long-standing contracts and relationshipswith other organizations in the private sector. There are more and moreorganizations looking to integrate technology and artificial intelligence andare seeking outside help. With effective R&D, they can explore and innovateefficient methods to satisfy this need. BAHcan also explore emerging international markets in the Middle East and Asia to expandtheir customer base and international presence. Though there are manyopportunities for BAH to grow, there are also many threats that have thepotential to affect the organization negatively.
One of their biggest threatsis their top-tier competitors: Boston Consulting Group, Bain Consulting,Deloitte LLP, Accenture, and McKinsey Consulting. These competitors spend moreon R&D than BAH which allows them to innovate and implement faster and moreefficiently. Therefore, BAH could fall behind in the market by not moving fastenough. BAH’s involvement in international markets pose a number of threats. SinceBAH relies on highly skilled workforce, one potential threat is not having enoughskilled workforce in the international market resulting in poor quality of workaffecting the organization’s name. Another threat in the international marketis its exposure to strict regulations and currency fluctuations (Booz Allen).BAH must adapt its policies to be in line with the foreign country or they willbe at risk for federal violations resulting in lawsuits. Currency fluctuationsare major as they could significantly affect BAH’s revenue and profitsespecially in unstable political environments.
After my analysis of strengths,weaknesses, opportunities, and threats, I also wanted to utilize the PESTELanalysis to analyze the macro environment of the organization. PESTELanalysis is a tactical tool to examine an organization’s Political, Economic, Sociocultural,Technological, Environmental, and Legal factors that could impact the organization.It’s essential to examine these as they could not only affect the organization,but the industry as a whole. Especially in international markets, they can poseoperating and legal challenges such as unstable market conditions and currencyfluctuations. Political factors influence Booz Allen Hamilton’s continuingprofitability in a particular market or country.
Since BAH is active in manydifferent countries, they are exposed to many different political environmentand their risks. In order to be prepared for all possibilities, they identifysystematic risks and contingency plans before entering a new market in aforeign country. Some political factors they consider are “political stability,importance of military invasion, intellectual property protection and level ofcorruption” (Fernfort). It’s important to account for the above mentionedfactors as an unstable political environment can adversely affect theorganization’s success in that area by passing unfavorable legislation andinfluencing the economic environment.
IP protection is crucial as lack of IPlaws can jeopardize methods, processes, and models unique to BAH. Economicfactors directly affect the business and also indicate the financial conditionof the economy. Supply/Demand, inflation, exchange rates, and recession are someeconomic factors that affect an organization’s operations and decision making.Some factors that BAH considers are inflation rate, interest rate, exchangerates, and stability of host country currency.
For example, exchange rates can affectprofit margins affecting the bottom line of the organization hindering itsgrowth. “Booz Allen Hamilton Holding Corporation uses country’s economic factorsuch as growth rate, inflation & industry’s economic indicators such asManagement Services industry growth rate to forecast the growth trajectory ofthe organization” (Fernfort). Sociocultural factors are essential fororganizations as they affect an individual’s interests, opinions, and attitudesin society. BAH understands its clients in order to understand their needs andhow to best solve them. When entering international markets, they adapt theirmarketing techniques and interactions to best suit the population at hand.
These sociocultural factors include attitudes, culture, and demographics asthey could potentially help or hurt in obtaining clients and keeping them.Technological factors that affects BAH are recent tech developments that areimpacting all sizes of businesses and how to integrate them along with cost toimplement it. BAH utilizes artificial intelligence, digital solutions, to “Developpredictive intelligence services that include anticipatory cyber threatsolutions, protection, and detection capabilities and the application of socialmedia analytics designed to provide early identification of trends that wouldotherwise not be possible using after-the-fact analysis of traditional datasources” (Washington Post – Booz Allen). Though environmental factorsaffect BAH, they are not as weighted as the rest of the factors.
BAH considersliability and environmental regulations when operating because different statesas well as countries have varying laws. They consider environmental pollutionlaws, waste management, and attitudes toward renewable energy (Booz Allen Data).Legal factors BAH prioritizes in considering are data protection methods andlaws, IP law, Employment law and Patent law. Because BAH is mainly anintelligence and technology based organization, information is their mostimportant resource. They take extraordinary measures to prevent data leaksalong with prioritizing non disclosure agreements among employees as their datais extremely sensitive. Due to their careful consideration of all factorsinvolved when entering markets, innovating new methods, and creating newproducts, Booz Allen Hamilton has had strategic success but they haveweaknesses they need to address in order to compete with their top competitors.Strategic SummaryBooz AllenHamilton has placed themselves in the middle of cutting edge technology.
Theirstrategy has always been focusing on entrepreneurship, innovation, and solvingthe unexpected. Senior Associate at BAH, Chris Holmes, said “The spirit ofentrepreneurism and innovation has been at our core since the beginning. And aswe looked ahead to the next 100 years, we had an opportunity to freshly infuseinnovation in how we approach the market and solve client problems”(Booz Allen – Insight). BAH utilizes a framework to gather thoughts, ideas,concerns, expertise and experiences to explore problems and derive solutions.In 2014, BAH created the Strategic Innovation Group (SIG) consisting of 1800people to “capture the smart thinking that already existed across the firm,take the best new and compelling ideas and build solutions around them thatwill resonate across the entire spectrum of our clients” according to KarenDahut, VP of SIG (Booz Allen – Innovation).
It was “created with an initial $40 million investment to identify,nurture and deliver solutions across the spectrum of defense and intelligence,civil, commercial and international clients, the SIG is a key element of thefirm’s Vision 2020 plan to address new growth opportunities” (Washington Exec).Some of its highlights since created are: