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Differentiation: How Are Professional Service Firms Using it to Compete?

January 2000

Research Question: Branding. Merging, acquiring or going public. Developing new services. These and other initiatives are evidence of how professional service firms are meeting the challenges of a changing marketplace. What other differentiation strategies and tactics are firms using to establish, maintain or extend a competitive advantage?

Summary: A nationwide survey of more than 420 professional service firms looks at the extent to which companies use differentiation approaches are deemed most successful. Respondents include firms from accounting; law; consulting (healthcare, human resources, management, information technology and a variety of consulting specialties); general contracting; and architecture & engineering. The study results point to the growing importance of differentiation as a means for firms to identify a sustainable uniqueness that can’t be easily duplicated.

Table of Contents:
Introduction
Key Findings
Finding I – 81% of respondents said their companies pursue differentiation approaches.
Finding II – As widespread as differentiation has become, professional services firms are generally unsophisticated in their approaches to applying it.
Finding III – Some of the most commonly implemented differentiation approaches are reported to be unsuccessful, while rarely-used strategies are reported to be successful.
Finding IV – Differentiation approaches that are more difficult to implement, and are therefore often avoided, are ultimately more likely to succeed.
Finding V – The rise of differentiation is an indication of the evolving nature of professional services into a more competitive environment where the buyers of professional services are more knowledgeable and have more choices.
Professional Service Industry Comparisons
Summary and Interpretation
Appendix

Format: Fifty-eight pages of charts, graphs, bullet points and commentary summarize the findings and conclusions of this study on professional service firm differentiation. Presented as a PowerPoint presentation on CD-ROM.