Blog

We typically characterize providers with revenues of $100m-$500m as occupying the mid-market — not small and specialized like boutiques, but not gargantuan and multi-dimensional like global firms.

Historically, mid-market players would stick to their boundaries (e.g. geo, services, industries) and grow by pricing themselves as a good alternative to the global firms. At the same time, unlike boutiques, mid-market firms were sizable enough — and typically staffed with good-quality resources — to be attract clients wary of specialists’ limitations.

The “enviable rut” between big and little used to be a nice place for mid-market firms to operate. But now, the gap whereby mid-market firms competed as cost-efficient generalists is rapidly closing.

Increasingly, global firms can compete on price based on better and more efficient delivery models, and the truly global nature of business. Likewise, more sophisticated clients have lessened their suspicion of specialists, and are willing to slot them in on projects involving globals, while accepting premium pricing based on their expertise.

For mid-market firms, options are limited. They must scale to at least ~$1 billion and expand footprints to compete with the mega-firms. But such growth can’t be accomplished quickly or organically. At the same time, focusing on core areas means both shrinking the business and carefully picking spots that promise continued opportunity (not to mention unseating incumbents).

Mid-markets seem to be approaching eat-or-be-eaten territory. Some will probably attempt to band together and go for mini-mega status. Others will accept the inevitable overture from the true megas, who have their own growth agendas to maintain.
The rest? Well, they will either shrink to greatness … or become another tombstone in consulting’s expansive graveyard.