The Cambridge Strategy Group has outlined a three-stage strategy for expanding its services and operations. As CSG expands its offerings, it will constantly focus on finding new ways to help small businesses become more successful.
The following diagram summarizes how our SWOT analysis defines the Key Success Factors of the market and Distinctive Competencies of the Cambridge Strategy Group.
Skills in marketing, communications
Founders working full-time jobs
Large company skills
|Opportunities||Threats||Key Success Factors|
Large # of businesses starting in United States
Core strengths in marketing/strategy
STRENGTHS AND WEAKNESSES
The Cambridge Strategy Group has a number of strengths that will enable it to favorably compete in this market. Its weaknesses are addressable and will be improved over time.
Strengths – The founders of the Cambridge Strategy Group have a broad background in marketing and communications that can easily be leveraged by a number of small business companies. The founders combine the training and knowledge gained at large firms such as IBM, EMC, and SunAmerica with small business work experience at a number of technica and consulting firms. CSG has a local presence in the Triangle Area of North Carolina, which has recently been rated as the #3 metropolitan area for small businesses in the U.S. by Dun and Bradstreet's Entrepreneur magazine. By using the latest technology to communicate among consultants and work together on projects, CSG will be able to minimize its costs and fees charged to its customers. CSG will stay focused on small businesses in an effort to own the category name. CSG also participates in the North Carolina chapter of the Council for Entrepreneurial Development.
Weaknesses – Currently, the founders of CSG all have full-time positions in consulting, business development or marketing strategy. All are working for CSG as a second job, preventing CSG from taking full advantage of the opportunities available. In order to minimize out-of-pocket costs, CSG is only concentrating on businesses in the Triangle Area of North Carolina. With consultants in Chicago, IL; Phoenix, AZ; and potentially Boston, MA; Portland, OR; and London, England, the opportunity to expand into other high-growth areas is available, but will require additional resources. CSG also does not have extensive skills in accounting and intends to find a lead accountant to either work on staff or as an outsourced contractor to provide services. With only three to four founders, CSG is unable to handle more than one or two projects at a time. This will be addressed as CSG becomes more comfortable with their projects, and is ready to expand the size of the team.
Distinctive Competencies – The distinctive competencies for the Cambridge Strategy Group are:
For small and emerging businesses looking for opportunities to increase their chance at success, CSG offers a set of services designed to improve overall business execution. Unlike traditional management consulting firms that concentrate on helping large clients identify problems, CSG focuses exclusively on working with small businesses to implement concrete, practical, short-term actions designed to start moving their business in the right direction.
The Cambridge Strategy Group will create a value proposition based on the following differential advantage ideas:
The Marketing Mix defined below explains the value that we will bring to our clients as well as the channels, communication, and costs that will be associated with our services.
The Cambridge Strategy Group provides much needed skills and experience to small business founders to help their businesses start moving in the right direction. Our services are tailored specifically to the unique needs of small and emerging businesses and focus on practical, short-term actions that can improve overall business execution. With a shortage of available talent plus the typical budget pressure usually associated with small businesses, our services provide a cost-effective alternative to obtaining highly-skilled marketing and strategy resources.
The Cambridge Strategy Group will position itself as the leading marketing and management consulting firm focusing exclusively on small businesses. The diagram below summarizes our positioning:
To simplify billing to clients, the Cambridge Strategy Group will work on a fixed pricing structure. CSG will determine the standard pricing structure for each deliverable based on hourly estimates and fees. This will be expressed to the client as a per-deliverable fixed price in a quote. Clients can determine which deliverables they would like to purchase. CSG will charge the quoted price even if we have underestimated hours, to maintain credibility with budget-conscious small businesses. Pricing structure will be based on $90/hour multiplied by the number of hours that it would take our most experienced consultant to finish the project. If less experienced consultants participate on the project, it will likely take more time; however, the price of the deliverable to the client will not change.
In time, CSG may consider a cash-and-equity arrangement, or potentially all equity for specific projects. Before we can begin with this stage of pricing, we will need more experienced finance and accounting skills to determine proper equity stakes that should be requested, etc. Additionally, CSG will offer cost-effective Web-hosting services that will provide ongoing revenue streams. It is anticipated that most clients will sign-up for our one-year contracts requiring minimal accounting.
Our initial focus will be in the Triangle Area of North Carolina. The Triangle Area was recently rated #3 in Dun & Bradstreet's Entrepreneur magazine list of the best metropolitan areas for small business. Once we secure our first client successes, we will expand to other regions where we already have a consulting presence, such as Phoenix, AZ and Chicago, IL. Our locations and focus will expand as we add new consultants to our talent pool.
We will use a number of relationships to promote the Cambridge Strategy Group.
Through participation in the North Carolina Chapter of the Council for Entrepreneurial Development, we will make contacts with key Venture Capitalists, small business founders, and small businesses resources in the area. Once we have helped our first few clients, we will then explore relationships with local newspapers. Participating in local chambers of commerce will also help us to get increased exposure. In every method of communication, we will constantly reinforce our differential advantage:
The 2001 Income Forecast model below demonstrates our initial test of the business concept. We have been conservative in our estimates of expenses, project size, project number, and income:
The short-term 2001 Income Forecast expects the Cambridge Strategy Group to complete a total of four client projects, averaging 50 hours each during 2001. As we move into the Long-term Income Forecast we assume that we have started working on more substantial projects identified by both Venture Capital firms and their sponsored companies.
The 20 projects averaging 200 hours each listed in 2002 represents approximately two person-years of work. However, additional time must be included for finding new clients and building Venture Capitalist relationships. For this forecast to become a reality, it will require either: (a) additional consultants to join the firm or (b) some members of CSG to work full-time on group activities. Note that "projects" are not synonymous with "clients." Any given client may require multiple projects from CSG.
Due to the low overhead associated with consulting, the Cambridge Strategy Group should be profitable in its first year of operations. The revenue potential of CSG is gated solely by the founders need to provide a constant income while filling the pipeline of the firm. The revenue figure in year 2003 represents less than five person-years of consulting work and could easily be exceeded by a larger, fully-committed team.
MILESTONES AND SCHEDULE
The milestones and schedule outlined below combine Cambridge Strategy Group's corporate strategy and execution plan. Successful implementation will realize the financial projections discussed above.
The Cambridge Strategy Group is positioning itself for steady, sustainable growth. Forming long-term, strategic partnerships with Venture Capital firms in the Triangle Area of North Carolina will further the mission of CSG by filling the sales pipeline with targeted small businesses. An established Venture Capital relationship will also open up new resources to CSG, materially impacting operations and service offering. New clients will be sought when Group resources are available to provide the highest level of consulting service. CSG strives to achieve 100% client satisfaction in all projects undertaken; consequently, a significant percentage of clients and projects will be generated from existing clientele. New consultant recruiting and hiring will always be driven by client needs. Geographic and service offering expansion will leverage existing client needs.
These milestones demarcate the growth of Cambridge Strategy Group and serve as a progress report of how well CSG is executing its strategy, vision, and business model.
The schedule below plots the Cambridge Strategy Group's execution timeline. By combining CSG's strategy and objectives with our milestones and execution schedule, the financials discussed above will be realized.
The Cambridge Strategy Group is focused specifically on helping small and emerging businesses maximize their potential for success. We differentiate ourselves in the following ways:
Key Success Factors: After exploring the opportunities and threats that permeate this market, the following Key Success Factors emerge as the requirements to be successful at providing marketing and management consulting services to small businesses.