5. Swot Analysis

The management team of the new venture will operate under curtain market conditions. The main strategic points for formulation activities of Marktune are compiled in SWOT-analysis (see Table 10).

STRENGTHS - Entrepreneurial experience of the company founders; - Exceptional focus on client's performance; - Outstanding knowledge of the CIS market; - Cost reduction by operating in low-cost Saratov area using information technologies; - Original know-how of the new venture; - Services imply high level of client's problem solving and continuous high profit margin; - Limitation of entrepreneurial threads as a result of high technical practices of the professional team; - Preliminary agreements with potential customers that are well-known companies.

WEAKNESSES - Bureaucratic/red tape and informational congestions in start-up period; - Limited experience in the target markets; - Growth problems of the fast expending company; - Possible lack of experience in implementing sophisticated orders; - Scarce of trained professionals in the fist two year of operations.

OPPORTUNITIES - The current political leadership is favourable for elaborating a clear Medium-Sized Enterprises policy; - The system of Chambers of commerce and industry that will support the new company development has been created based on 155 territorial chambers; - Strengthening the institutional framework of the market economy could lead to strengthening the cooperation among neighbouring regions; - High potential of company services in repeat changing business environment; - Business intelligence curiosity among clients bring opportunities to consulting business; - Profitability improvements and cost management practices; - Acquisition of the private office (real estate); - Opening the Russian market after WTO accession could create strong competition among middle businesses.

THREATS - Highly competitive market creates threats to business plan implementation; - Risk of not finding high quality consultants; - Financing middle businesses is still in beginning stage; - Degrade of profit margin in service industries as a result of high capital costs; - Threaten microenvironment changes; - Industrial legislation amendments; - Threads of market downturns.

Table 10. SWOT-analysis of the new venture

Power of suppliers

Taking into consideration Porter`s Five Forces Model the power of suppliers will take the most influential role in the consulting area. The main resources that should be supplied in consulting area are human resources.

Staff shortage is becoming a problem for the Russian consulting. In this regard, question of motivation has become more urgent and non-material motivation is very important. The main capital in consulting business is people with innovative thinking. In the consulting area staff turnover is particularly high. 30-40% employee turnover a year is a standard situation for the consulting business.

People come in consulting in Russia in many ways: directly after high school, from the scientific community, and from industries. Consulting companies in particular are actively eyeing the graduates of prestigious Moscow universities. Recruiting of prospective candidates starts with the college. There is serious fight for the most talented graduates among consulting firms. Many consulting companies implement programs for students and graduates, mostly financial specialties.

Management consulting jobs are less available to young professionals because they require a great deal of experience and knowledge. After all, before advising companies on organizational development, strategic planning, business development, etc., people need to acquire a lot of experience working within the company and then become an independent consultant.

Typically, the composition of the company is completely updated every five years. In cases when the professional growth of consultant stops, such an employee is displaced by "cheap" consultants (often - yesterday's graduates), and he has to look for a higher position at another company.

The consulting business has its own specifics; it employs people with a very high level of intelligence. Accordingly, the incentive system should be built a little differently. Besides the material interest, it is important for consultants to realize their potential. People need to achieve the objectives set for the company through the realization of personal goals. A company, in turn, reach their goals through self-realization of the employee. Here, an important role plays non-material incentives and staff retention. One such method is to manage a career. Its essence lies in the fact that the development of employee runs through self-assessment. Consultants with the active support of the company, including the human resource department and management, set goals for themselves and monitor their implementation. Since the beginning of the year, each team member wrote a personal development plan, which reflects the tasks that it must achieve over the planning period, and the reward that he will receive for its achievement. Plans for the employees should be correlated with the development strategy of the company. After approval and implementation of the plan, the employee may hold a personal appraisal of the indicators that he himself exhibited. Finally, it will be clear that accomplished and what is not; whether to change the scope of activities or stay in the same place; how to improve the professional level of specialists.

There is another feature of the consulting business. At some stage, the consultant is growing as a technical specialist. But there comes a time when from the level of manager he has to move into the category of specialists, who develops the business. Some see themselves as only good technicians, but it already is not interested for the company. Find people who are able to develop business is the most acute problem. Many professionals are well aware of the technical component of the project, but to sell it is a problem. To sell means to hear the client's needs. It is able to do not everyone.

Today the consulting market is wider than available consultants. This means that the demand for services of consulting companies significantly exceeding the supply. There are several reasons for this: one is “civilized” growth for consulting services and increased interest in consulting services by mid-sized companies.

Another factor causing increase of the power suppliers during the rapid economic growth is slow rise of prices for the services of consultants and accelerated growth of employees’ wages. Thus, prices for consulting services in the last ten years have grown insignificantly - by about 10-15% per year, which corresponds to the rate of inflation, while wage growth was observed at the level of 20-25% per year.

In addition, the market imposes strict criteria to the selection of consultants. The most needed specialists are familiar with industrial features of the client's business.

Moscow market of human resources for consulting business is going through difficult times: on the one hand, there is a shortage of qualified personnel, on the other high salary claims exist.