Evita Faith Leong

BSA-IV

“WHAT WENT WRONG TO MONITOR GROUP AND WHAT HAPPENED TO THE

COMPTETITIVE SUSTAINABLE ADVANTAGE CONCEPT WHICH THE MONITOR GROP IS
EXPECTED TO BE AN EXPERT”

Monitor group co-founded by Michael Eugene Porter , a renowned master in business strategy
and the founder of Porters Five forces went bankrupt on November 2012 and was bought by
their biggest rival Deloitte Consulting Group. The reason for their bankruptcy was that they
could no longer pay their bills and their liabilities exceed their revenues and they are forced to
file bankruptcy protection. Now what made a very successful company to be bankrupt? it all
happened when financial crisis came in November 2008 While Monitoring group was focused
on expanding and creating new infrastructures. It turns out that they could no longer support it
by their revenues due to recession, and also competitors was focused on expanding into more
operational areas like IT and operational improvement while Monitoring group focused on
expanding their horizons without improving their services and adapting to technological
advances which really hit a wrong timing in their business strategy. They believe that through
sustainable competitive advantage and getting ahead of the competitor would make them
successful in their business ventures but it does not work on their favor. They were lacking
something important that they fail to consider and that is Macro external forces facing an
organization. ( a business tool called PESTEL) the letters stand for Political, Economic, Social,
Technological, Environmental and Legal, depending on the organization it can be reduced to
PEST or some areas can be added (e.g. Ethical). They were too preoccupied with competition
that they don’t weigh other factors that can affect their business like RECESSION, they were not
prepared when an economic downfall happens which cannot be controlled, and they have
underlying bills which are not yet paid, and recession happened so what’s the result?
Bankruptcy. Due to recession they started losing money and their revenues could no longer
cover their cost. other factors to consider in PESTEL was technology it was a threat to the
Monitoring group rather than an opportunity because they were not able to catch up with their
technological advances to add up, they were also involved in a controversy of entering into a
million dollar contract to Libya's ex dictator Qaddafi for consulting and publications work and
monitor group was used to improve the Libya's ex dictator international image. It made a bad
image to the consulting group leading to a loss of customers. Monitoring group was also
focused on gaining sustainable competitive advantage and defeating their rivals but they do not
add value to their customers. Especially in the modern world were new entrants can easily
enter due to the rise of the internet era. It seems like getting ahead with the competition is not
enough to be successful in business. since customers are in charge in the market place what
matters the most is the product and the service that you will give to a customer.

Lastly, Monitors consulting group was not studying the market niche and the rise and fall of the
market. It also has something to do with their working capital management. If monitors
consulting group studied the economic trend of boom and bust cycles they can make a better
strategy and timing on when they will expand and invest and be aggressive and when they
will be conservative in their working capital. They were not also efficient in their payable
management and how they can forecast their revenues and they did not planned well their
capital budgeting projects which yields long term cost. Will it outweigh revenues or will it affect
the business stability in the long run?. To sum it up, there is a lot lacking in Monitors
consulting group this includes using other business strategy to make their business sustainable ,
because competitive advantage is not sustainable alone, and also taking consideration, the cost,
the customers, the external forces, their financial management which includes their payable
management, their working capital management, their capital budgeting management, and
maintaining their good reputation to make the company running for many years.