Flevy Management Insights Case Study
Strategic Transformation for Construction Firm in Green Building Niche


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Boston Matrix to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

TLDR A mid-size construction firm specializing in green buildings experienced a 20% market share decline due to competition and outdated PM systems. A strategic overhaul led to a 10% market share increase and enhanced operational efficiency and project quality, underscoring the need for tech adoption and workforce training to meet strategic goals.

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Consider this scenario: A mid-size construction firm specializing in green buildings is facing strategic challenges as indicated by a Boston Matrix analysis.

The organization has experienced a 20% decline in market share due to increased competition and regulatory changes in sustainability standards. Internally, the company deals with outdated project management systems and a skills gap in sustainable construction techniques. The primary strategic objective is to regain market leadership through technological adoption and operational efficiency improvements.



Strategic Analysis

The construction industry, particularly in green building, is undergoing significant transformation driven by regulatory mandates and increasing consumer demand for sustainable solutions.

We begin our analysis by evaluating the primary forces driving the industry:

  • Internal Rivalry: High due to many established players and new entrants focusing on sustainability.
  • Supplier Power: Moderate, as specialized sustainable materials are sourced from a limited number of suppliers.
  • Buyer Power: Increasing, with clients demanding more eco-friendly and cost-effective building solutions.
  • Threat of New Entrants: High, with low barriers to entry and growing interest in green building.
  • Threat of Substitutes: Low, as traditional building techniques are being phased out in favor of sustainable methods.

Emergent industry trends include a shift towards digital construction technologies and increased regulatory scrutiny on sustainability. Key changes in industry dynamics include:

  • Adoption of Building Information Modeling (BIM): This creates opportunities for improving project accuracy but risks require significant upfront investment in technology and training.
  • Regulatory Changes: Stricter sustainability standards offer opportunities for market differentiation but risks include non-compliance penalties.
  • Customer Demand for Green Buildings: Increasing demand offers revenue growth opportunities but risks being outpaced by more innovative competitors.

PESTLE analysis reveals that Political factors include stringent sustainability regulations; Economic factors show a growing market for green buildings; Social factors indicate increasing consumer preference for eco-friendly living spaces; Technological factors highlight rapid advancements in construction tech; Legal factors point to strict compliance requirements; and Environmental factors emphasize the need for sustainable practices.

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Internal Assessment

The organization boasts strong expertise in traditional construction but faces weaknesses in adopting new technologies and sustainable practices.

MOST Analysis

The Mission is to lead in green building innovation. Objectives include improving market share by 15% and reducing project completion times by 10%. Strategies involve adopting BIM and enhancing workforce skills in sustainability. Tactics include partnering with tech firms and launching training programs.

Digital Transformation Analysis

The organization is in the early stages of digital transformation. Current digital tools are inadequate for advanced modeling and project management. There is a need for investment in BIM and IoT technologies. Employee digital literacy is low, requiring comprehensive training programs. Proper implementation could significantly improve efficiency and project accuracy.

Gap Analysis

The Gap Analysis reveals a significant technology and skills gap. Current project management systems are outdated, leading to inefficiencies. There is a lack of skilled workforce in sustainable construction techniques. Addressing these gaps necessitates investment in technology and training. Bridging these gaps is critical for maintaining competitiveness.

Strategic Initiatives

The leadership team formulated strategic initiatives based on the comprehensive understanding gained from the previous industry analysis and internal capability assessment, outlining specific, actionable steps that align with the strategic plan's objectives over a 3-5 year horizon to drive growth by 20% over the next 12 months .

  • Adoption of BIM Technology: This initiative aims to improve project accuracy and reduce completion times. The source of value creation comes from enhanced project management capabilities, expected to improve operational efficiency and client satisfaction. Resource requirements include investment in software, training, and IT support.
  • Workforce Training in Sustainable Practices: The goal is to bridge the skills gap and enhance project quality. Value is created through improved project outcomes and compliance with sustainability standards. Resources needed include training programs, partnerships with educational institutions, and internal trainers.
  • Market Expansion: Targeting new geographical regions with high demand for green buildings. The initiative aims to diversify revenue streams and capture new market share. Value is created through increased sales and market presence. Resource requirements include market research, local partnerships, and marketing campaigns.
  • Client Relationship Management: Enhance client engagement through personalized services and sustainable building solutions. Value is created through improved client retention and repeat business. Resources needed include CRM software, dedicated account managers, and client feedback systems.
  • Operational Efficiency Improvement: Streamline processes to reduce waste and improve project timelines. Value is created through cost savings and faster project delivery. Resource requirements include process reengineering, lean management training, and continuous improvement programs.
  • Strategic Partnerships: Form alliances with technology providers and sustainable material suppliers. The goal is to leverage partner expertise and resources. Value is created through shared innovation and cost-sharing. Resources needed include partnership agreements, joint projects, and collaborative R&D.
  • Brand Positioning and Marketing: Strengthen brand perception as a leader in green building. Value is created through increased brand equity and market differentiation. Resources needed include marketing campaigns, PR activities, and brand audits.
  • Boston Matrix Analysis: Reevaluate business units to identify stars, cash cows, question marks, and dogs. The objective is to allocate resources effectively and divest underperforming units. Value is created through optimized resource allocation and improved profitability. Resources needed include market analysis, financial modeling, and strategic planning sessions.

Boston Matrix Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


That which is measured improves. That which is measured and reported improves exponentially.
     – Pearson's Law

  • Market Share Growth: Measure the increase in market share to gauge the effectiveness of market expansion efforts.
  • Project Completion Time: Track the reduction in project timelines to assess operational efficiency improvements.
  • Client Satisfaction Score: Monitor client feedback to evaluate the success of client relationship management initiatives.
  • Employee Training Hours: Measure the number of training hours to ensure workforce skills development in sustainable practices.
  • ROI on Technology Investments: Assess the financial returns from technology adoption to determine cost-effectiveness.

These KPIs provide insights into the effectiveness of strategic initiatives. Monitoring these metrics will help the organization make data-driven decisions and adjust strategies as needed.

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Stakeholder Management

Success of the strategic initiatives hinges on the involvement and support of both internal and external stakeholders, including frontline staff, technology partners, and marketing teams.

  • Employees: Crucial for implementing operational and technological changes.
  • Technology Partners: Responsible for providing and maintaining new construction technologies.
  • Clients: Key to providing feedback and ensuring satisfaction with green building solutions.
  • Investors: Provide financial backing for strategic initiatives.
  • Suppliers: Essential for sourcing sustainable materials and ensuring supply chain continuity.
  • Regulatory Bodies: Ensure compliance with sustainability standards and regulations.
  • Training Providers: Deliver necessary workforce training in sustainable practices and new technologies.
  • Marketing Team: Develop and execute campaigns to enhance brand positioning.
Stakeholder GroupsRACI
Employees
Technology Partners
Clients
Investors
Suppliers
Regulatory Bodies
Training Providers
Marketing Team

We've only identified the primary stakeholder groups above. There are also participants and groups involved for various activities in each of the strategic initiatives.

Learn more about Stakeholder Management Change Management Focus Interviewing Workshops Supplier Management

Boston Matrix Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Strategic Transformation Roadmap (PPT)
  • Boston Matrix Analysis Report (PPT)
  • Technology Investment Financial Model (Excel)
  • Workforce Training Plan (PPT)
  • Market Expansion Strategy Presentation (PPT)

Explore more Boston Matrix deliverables

Adoption of BIM Technology

The implementation team leveraged the ADKAR Model and the McKinsey 7S Framework to facilitate the adoption of BIM technology. The ADKAR Model, developed by Prosci, is a goal-oriented change management model that guides individual and organizational change. It was useful in this context to ensure that employees successfully transitioned to using BIM technology. The team followed this process:

  • Assessed the awareness of the need for BIM technology among employees through surveys and focus groups.
  • Created a desire for change by highlighting the benefits of BIM in internal communications and workshops.
  • Developed the knowledge required for BIM implementation through targeted training programs.
  • Enhanced employees' ability to use BIM by providing hands-on training sessions and resources.
  • Reinforced the change by setting up a support system for continuous learning and troubleshooting.

The McKinsey 7S Framework was also deployed to ensure that all aspects of the organization were aligned with the new technology. This framework examines 7 internal elements of an organization: strategy, structure, systems, shared values, style, staff, and skills. The team followed this process:

  • Aligned the overall strategy with the new BIM technology by integrating it into the company’s long-term goals.
  • Restructured the organization to support BIM implementation, including creating new roles and responsibilities.
  • Updated systems to incorporate BIM software and tools.
  • Promoted shared values that emphasize innovation and continuous improvement.
  • Adopted a management style that supports change and encourages feedback.
  • Ensured staff had the necessary skills by investing in extensive training programs.

The implementation of these frameworks resulted in a smoother transition to BIM technology. Employees adapted quickly to the new tools, leading to a 15% reduction in project completion times and improved project accuracy.

Boston Matrix Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Boston Matrix. These resources below were developed by management consulting firms and Boston Matrix subject matter experts.

Workforce Training in Sustainable Practices

The implementation team utilized the ADDIE Model and the Kirkpatrick Model to design and evaluate the workforce training program. The ADDIE Model is a systematic approach to instructional design that stands for Analysis, Design, Development, Implementation, and Evaluation. It was particularly useful for creating an effective and comprehensive training program. The team followed this process:

  • Analyzed the current skills gap in sustainable construction practices through employee assessments and industry benchmarks.
  • Designed a training curriculum that addressed identified gaps and aligned with industry best practices.
  • Developed training materials, including manuals, e-learning modules, and hands-on workshops.
  • Implemented the training program across the organization, ensuring participation from all relevant employees.
  • Evaluated the effectiveness of the training through feedback surveys and performance assessments.

The Kirkpatrick Model was used to evaluate the impact of the training program. This model assesses training effectiveness on 4 levels: reaction, learning, behavior, and results. The team followed this process:

  • Measured participants' reactions to the training program through post-training surveys.
  • Assessed the knowledge gained by conducting pre- and post-training tests.
  • Observed changes in behavior by monitoring the application of sustainable practices on projects.
  • Evaluated the overall results by measuring project outcomes and sustainability compliance rates.

The implementation of these frameworks led to a significant improvement in workforce skills. The organization saw a 20% increase in project quality and a 25% reduction in non-compliance issues related to sustainability standards.

Market Expansion

The implementation team employed the GE-McKinsey Matrix and the VRIO Framework to guide the market expansion strategy. The GE-McKinsey Matrix is a tool that helps organizations prioritize investment among different business units based on industry attractiveness and business strength. It was useful for identifying the most promising markets for expansion. The team followed this process:

  • Assessed industry attractiveness by analyzing market size, growth rate, and competitive intensity in various geographical regions.
  • Evaluated business strength by examining the company’s market share, brand reputation, and operational capabilities in each region.
  • Prioritized markets for expansion based on the combined scores of industry attractiveness and business strength.
  • Developed tailored market entry strategies for the top-priority regions.

The VRIO Framework was used to analyze the organization’s internal resources and capabilities. This framework evaluates resources based on Value, Rarity, Imitability, and Organization. The team followed this process:

  • Identified valuable resources that could provide a competitive advantage in new markets, such as advanced sustainable construction techniques.
  • Assessed the rarity of these resources to determine their uniqueness in the target markets.
  • Evaluated the difficulty of imitating these resources by competitors.
  • Ensured the organization was structured to fully leverage these resources in the new markets.

The implementation of these frameworks resulted in a focused and data-driven market expansion strategy. The organization successfully entered 3 new geographical regions, achieving a 10% increase in overall market share and diversifying its revenue streams.

Client Relationship Management

The implementation team utilized the Customer Relationship Management (CRM) Framework and the Service-Profit Chain Model to enhance client engagement. The CRM Framework focuses on managing a company’s interactions with current and potential clients, aiming to improve business relationships and drive growth. It was particularly useful for structuring client engagement initiatives. The team followed this process:

  • Implemented CRM software to centralize client data and streamline communication.
  • Segmented clients based on their needs and preferences to tailor engagement strategies.
  • Developed personalized service offerings and communication plans for each client segment.
  • Monitored client interactions and feedback to continuously improve service quality.

The Service-Profit Chain Model was used to link employee satisfaction, customer loyalty, and profitability. This model emphasizes the importance of internal service quality in driving external service value. The team followed this process:

  • Invested in employee training and development to enhance service delivery capabilities.
  • Created a positive work environment to boost employee satisfaction and motivation.
  • Measured client satisfaction and loyalty through regular surveys and feedback mechanisms.
  • Analyzed the impact of improved client relationships on profitability and business growth.

The implementation of these frameworks led to significant improvements in client relationships. The organization saw a 15% increase in client retention rates and a 20% boost in client satisfaction scores, contributing to higher revenue growth.

Operational Efficiency Improvement

The implementation team leveraged Lean Management and Six Sigma methodologies to streamline processes and improve operational efficiency. Lean Management focuses on minimizing waste and maximizing value in organizational processes. It was particularly useful for identifying inefficiencies and optimizing workflows. The team followed this process:

  • Conducted value stream mapping to identify waste and bottlenecks in current processes.
  • Implemented continuous improvement initiatives to eliminate identified inefficiencies.
  • Engaged employees in problem-solving activities to foster a culture of continuous improvement.
  • Monitored process performance through key performance indicators (KPIs) and regular reviews.

Six Sigma was used to improve process quality and consistency. This methodology aims to reduce process variation and defects through data-driven decision-making. The team followed this process:

  • Defined project goals and process metrics through the DMAIC (Define, Measure, Analyze, Improve, Control) approach.
  • Measured current process performance to establish baselines.
  • Analyzed data to identify root causes of process inefficiencies and defects.
  • Implemented improvements to address identified issues and optimize processes.
  • Controlled the improved processes through ongoing monitoring and adjustments.

The implementation of these methodologies resulted in significant operational improvements. The organization achieved a 15% reduction in project completion times and a 10% decrease in operational costs, leading to higher profitability and customer satisfaction.

Strategic Partnerships

The implementation team employed the Resource-Based View (RBV) and the Strategic Alliance Framework to form effective partnerships. The RBV focuses on leveraging a firm’s internal resources and capabilities to achieve competitive advantage. It was useful for identifying valuable resources that could be enhanced through partnerships. The team followed this process:

  • Identified core resources and capabilities that could benefit from external expertise and resources.
  • Evaluated potential partners based on their ability to complement and enhance these resources.
  • Developed partnership criteria and selection processes to ensure alignment with strategic goals.
  • Negotiated partnership agreements that clearly defined roles, responsibilities, and value-sharing mechanisms.

The Strategic Alliance Framework was used to structure and manage partnerships. This framework focuses on creating mutually beneficial relationships between organizations. The team followed this process:

  • Defined strategic objectives and desired outcomes for each partnership.
  • Established governance structures to manage and oversee partnership activities.
  • Developed joint action plans and performance metrics to track progress and success.
  • Fostered open communication and collaboration between partners to ensure alignment and synergy.

The implementation of these frameworks led to successful strategic partnerships. The organization formed alliances with leading technology providers and sustainable material suppliers, resulting in enhanced innovation capabilities and cost efficiencies. These partnerships contributed to a 10% increase in project quality and a 5% reduction in material costs.

Brand Positioning and Marketing

The implementation team utilized the AIDA Model and the Brand Equity Model to strengthen brand perception. The AIDA Model focuses on the stages of consumer engagement: Attention, Interest, Desire, and Action. It was useful for designing marketing campaigns that effectively captured and converted consumer interest. The team followed this process:

  • Developed marketing messages that captured the attention of the target audience through compelling visuals and headlines.
  • Created content that generated interest by highlighting the benefits of green building solutions.
  • Fostered desire by showcasing successful projects and client testimonials.
  • Encouraged action through clear calls-to-action and easy conversion pathways.

The Brand Equity Model was used to measure and enhance the brand’s value. This model evaluates brand equity based on brand awareness, brand associations, perceived quality, and brand loyalty. The team followed this process:

  • Measured brand awareness through market surveys and social media analytics.
  • Identified and strengthened positive brand associations through targeted marketing efforts.
  • Enhanced perceived quality by showcasing industry certifications and awards.
  • Boosted brand loyalty through loyalty programs and consistent customer engagement.

The implementation of these frameworks significantly improved brand positioning. The organization saw a 20% increase in brand awareness and a 15% boost in customer loyalty, resulting in higher market share and revenue growth.

Boston Matrix Analysis

The implementation team utilized the Product Life Cycle (PLC) Model and the VRIO Framework to conduct the Boston Matrix Analysis. The PLC Model examines the stages a product goes through from introduction to decline. It was useful for identifying the current stage of each business unit and making informed decisions. The team followed this process:

  • Assessed the current stage of each business unit by analyzing sales data and market trends.
  • Identified units in the growth stage for further investment and development.
  • Recognized units in the maturity stage for optimization and cost management.
  • Determined units in the decline stage for potential divestment or repositioning.

The VRIO Framework was used to evaluate the organization’s resources and capabilities. This framework assesses resources based on Value, Rarity, Imitability, and Organization. The team followed this process:

  • Identified valuable resources that provided a competitive advantage in each business unit.
  • Assessed the rarity of these resources to determine their uniqueness.
  • Evaluated the difficulty of imitating these resources by competitors.
  • Ensured the organization was structured to fully leverage these resources.

The implementation of these frameworks resulted in a comprehensive Boston Matrix Analysis. The organization successfully reallocated resources to high-potential business units, leading to optimized investment decisions and improved profitability.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Achieved a 15% reduction in project completion times through the adoption of BIM technology.
  • Increased market share by 10% by successfully entering three new geographical regions.
  • Improved project quality by 20% and reduced non-compliance issues by 25% through workforce training in sustainable practices.
  • Enhanced client retention rates by 15% and boosted client satisfaction scores by 20% via improved client relationship management.
  • Reduced operational costs by 10% and project completion times by 15% through Lean Management and Six Sigma methodologies.
  • Formed strategic partnerships that resulted in a 10% increase in project quality and a 5% reduction in material costs.
  • Increased brand awareness by 20% and customer loyalty by 15% through targeted marketing and brand positioning efforts.

The overall results of the initiative indicate significant progress towards the strategic objectives, particularly in operational efficiency and market expansion. The adoption of BIM technology and Lean Management practices led to notable reductions in project completion times and operational costs, directly contributing to higher profitability. Additionally, the successful market expansion into three new regions and the formation of strategic partnerships enhanced the company's competitive position and diversified revenue streams. However, the initiative faced challenges in fully bridging the skills gap in sustainable practices, as evidenced by the 25% reduction in non-compliance issues, which, while substantial, indicates room for further improvement. Additionally, while client satisfaction scores improved, the increase in market share fell short of the initial 15% target, suggesting that more aggressive or alternative market penetration strategies could have been employed.

Moving forward, it is recommended to continue investing in workforce training to further close the skills gap in sustainable practices, potentially through partnerships with educational institutions or industry certification programs. Additionally, exploring more aggressive market expansion strategies, such as mergers or acquisitions, could help achieve the desired market share growth. Enhancing the CRM system with advanced analytics and AI capabilities could further improve client relationship management and satisfaction. Finally, maintaining a focus on continuous improvement and innovation, particularly in adopting new technologies and sustainable practices, will be crucial for sustaining competitive advantage and market leadership.

Source: Strategic Transformation for Construction Firm in Green Building Niche, Flevy Management Insights, 2024

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