Eden McCallum: A Network-Based Consulting Firm (A)

Eden McCallum pioneered the network-based ("virtual") consulting firm model in the UK. Contracting freelance consultants on a per-project basis keeps overheads lean so that Eden McCallum's fees are a fraction of the big firms' rates. Their flexible, low-cost model has attracted top-notch corporate clients, resulting in steady double-digit annual growth in its first nine years. In January 2009, however, the global economic crisis has dramatically reshaped the competitive landscape and the founders must decide between pursuing their high-growth strategy versus retrenching - including cutting costs and pulling out of their first international expansion that they had launched the prior year. This case explores how the elements of a firm's innovative model reinforce each other and what happens when the environment changes.