The Study On The Development Of Management Consulting Industry In China Based On The SCP Paradigm

The value of the consultation is to eliminate doubt and confusion of demanders by using the power of experts. The consultation itself has a long history, however, until1926, the establishment of consulting company McKinsey in USA marked the combination of consulting and business activities. At present, the management consulting industry is booming worldwide and becomes one of the "sunrise industries". As China has entered the stage of accelerating transformation, more and more enterprises are faced with competitive pressure and confusion of direction, means and mechanisms in the development process, more and more entrepreneurs also hope management experts to address the development and management issues by a systematic and efficient manner. This also shows that the management consulting industry in China has a larger space for development. Nevertheless, the external industry environment of the management consulting industry in China is not mature and self-development of the management consulting firm is not perfect.Especially in the concept of consultation, grasping customer needs as well as the mode of operation of the consulting business, the consulting firms are in the constantly adjusted process.The management consulting industry in China is selected as the research object. Reviewing the history of the management consulting industry and combined with the background of China’s accelerated transition, the paper uses industrial organization theory and management theory, and literature, empirical analysis, comparative analysis method, game analysis and other research methods, especially combines the SCP paradigm with PEST analysis tools, and make use of appropriate indicators for the management consulting industry to analyze the market environment and the macroeconomic environment of this industry. The paper is in-depth analysis of the status of the management consulting industry based on market structure, market behavior and market performance and points out the problems and reasons in the development process. On the basis of it, the paper puts forward to improve the market structure of the industry through policy support, and regulate market behavior by reling on strengthening industry self-management, and improve the market performance by making the local management consulting enterprises into fully intelligent organization of full capacity.The paper is divided into nine chapters. The first chapter is the introduction. It points out the research background and the purpose and significance of the topic, reviews and comments the theory of management consulting, integrates the relevant research literature, respectively from the three aspects of market structure, market behavior and market performance, and presents research content, method and technology roadmap on this basis. The second chapter points out the modern service industries have already been included in the scope of the study of the theory of industrial organization, and the SCP paradigm is the main analytical tool in the current study, but in actual use, many scholars would amend the paradigm in accordance with external environment and the characteristics. The third chapter expounds origin and development course of the management consulting industry, especially focuses on the history of management consulting industry in the United States, Germany, Japan, and China. There is a big gap between the management consulting industry in China and developed countries. The fourth chapter uses PEST analysis tools and focuses on the political and legal environment, economic environment, social and cultural environment, technological environment on China’s management consulting industry, as well as the impact on the management consulting organizations produced by these environments. The next chapters from the fifth to the seventh focuse on market structure, market behavior, and market performance to study the development status of China’s management consulting industry. In terms of market structure, Chapter V pays emphasis on buyer concentration, seller concentration, product differentiation, barriers to entry and exit, points out that the demand of China’s management consulting is in the stable growth, but the other hand, the low productivity of management consulting firm, the low entire market concentration and low entry and exit barriers increase the intensity of competition in the industry. In terms of market behavior, management-consulting firms are divided into three categories in accordance with their comprehensive strength and market share. Chapter Ⅵ respectively compares the overall performance of their market behavior, evaluates market behavior of three echelons based on the empirical analysis of customer business behaviors, and emphatically examines the market behaviors of international management consulting company through case law analysis and game analysis, and points out that local management consulting organization is difficult to compete with multinational management consulting firm in the knowledge management, brand management, customer vertical constraints, etc. Measure of market performance can start from the enterprise level or the industry level. Combined with the characteristics of the management consulting industry, Chapter Ⅶ mainly analyzes customer satisfaction and comprehensive ability through empirical analysis methods, and points out that customer satisfaction and comprehensive capacity of China’s management consulting firm still need to be upgraded, and explains that the main reasons for the formation of these situations. Chapter Ⅷ suggests development strategies of optimizing the market structure, market behavior, market performance, and promoting the comprehensive development of the industry, by improving the degree of concentration of the buyer’s market through policies of supporting local management consulting enterprises, stimulating buyer demand through preferential policies, regulating market behaviors through the establishment of a unified industry association, developing guidance on the pricing system, improving the qualification and managing members strictly, and the market performance of the industry by creating local companies into fully intelligent organizations which are made from perspectives of staff development, marketing strategy, brand development and management, financial management, and knowledge management. The final chapter is a summary and outlook.