Global consultancies: determinants of market entry and strategies for conquering clients in foreign locations

Abstract

Reports in the general and specialist press as well as several official estimates (e.g. UNCTAD, 1993, EU, 1989-1996) point at a rapid increase in the use and internationalisation of management consultancies. However, the application of MNE definitions, measurements and theories to this type of services is still in its infancy. Thus, this paper sets out to identify first, the main determinants of market seeking investments of global consultancies, they evolved over time, and its implications for the nature and scope of subsidiaries activities. These are more like miniature replicas of their parent firms than specialised units in a world wide service network. Secondly, the strategies they have used to tap successfully into foreign markets, overcoming the problems facing service providers (e.g. Holmstrom, 1985, Dunning, 1989) and the liability of operating in a foreign location. It focus on the importance of trustcreating mechanisms for the establishment of lasting relationships with clients and how they were facilitated by shared social, cultural or educational proximity between consultants and clients. It draws on in-depth interview based case studies of twelve global consultancies and their operations in the Portuguese economy. Avenues for future research are pointed out.