4.6. Main factors of competition

Because of the specific nature of consulting services in the market price elasticity is low. This occurs for several reasons:

• Buyers do not have full information about services and prices. For clients it is difficult to conduct a comparative market analysis of consulting services. Unlike the standard methods adopted by the commodities markets, it is impossible to make test purchases, analyze samples, etc.

• High cost of switching to another consultant. Customers already have paid for that the consultant met with his business, and provided him with confidential documents, it is difficult to change it to other consultants.

• Very high risk of purchasing poor-quality services. This is due to underdevelopment of the market and specific services.

• Target segment of consumers believed that the brand is characterized by high added value that distinguishes it from the products of competitors.

The price elasticity within the segment is usually much higher than between different segments. This means that the competition between PwC and KPMG may be the price, and between KPMG and the average Russian consulting companies - can not. In the event that PwC will lower prices for services, then it is likely to attract customers from the middle segment, rather than get customers KPMG. Conversely, if BKG Profit Technology will raise the price of services to the level of BCG, it will not get clients from the upper segment, but rather to lose their own. It’s possible to attract customers from the low segment to the acquisition of better services by lowering prices, but not vice versa.

Russian consulting companies vs. international consulting companies

From a financial point of view of Russian consultants services more accessible⁴² (see Table 5). Hour of work specialist from a small Russian consulting companies would cost an average $ 40-50. While the typical foreign company will order $ 150-210 per hour, and representatives of the "Big Four" - up to $ 250 per hour.

With regard to specific specialists, it is possible to bring these guidelines: professional advice on tax and law in the leading Russian companies worth between $ 100 per hour. More than $ 150 per hour will cost consultation of company engaged in management consulting. And the cost of advice from a partner from a domestic firm, part of the top twenty largest firms, and even higher - more than $ 250 per hour.

The average cost of a consulting project (for setting accounting and integrated marketing, diagnosis or strategic business planning, construction management business processes, etc.) in Moscow today ranges between $ 5 000 and $ 100 000. Other advantages and disadvantages of international and Russian companies listed in Table 5.

Advantages of international companies	Advantages of Russian companies
1. Fixed technology project management 2. Large base of knowledge, global experience 3. A wide range of services 4. Availability of methods and practical experience of program management changes in the conditions of different countries 5. Accounting for global business development trends, technologies, specific industries 6. Help interacting with foreign partners, as a result of associated consulting 7. The credibility of international experience to a greater extent than domestic	1. Deeper knowledge of the specifics of the Russian market and the national mentality 2. Narrow specialization and hence the practical orientation of consulting (up to operational level) 3. Greater flexibility in dealing with clients 4. Lower prices
Disadvantages of international companies	Disadvantages of Russian companies
1. In some cases the level of consultants does not match the name of the company 2. Weak targeting specificity of the client - low flexibility in relations	1. Not well-developed technology of project management 2. The lack of international experience and knowledge in the management 3. Weak development of the business culture, including performance standards, mandatory 4. Weak brand recognition 5. Striving to increase the volume of orders at the expense of service quality

Table 5. Comparison of Russian and international companies.⁴³