McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions. It is recognized as a respected leader in the management consulting industry[3] and has been a top employer for new MBA graduates since 1996

Type Incorporated PartnershipIndustry Management consultingFounded 1926

Founder(s)James O. McKinsey and Marvin Bower

Number of locations

over 100 officesover 45 countries

Key people

Dominic Barton(Managing director)Ron Daniel(Senior partner emeritus)Fred Gluck(Senior partner emeritus)Rajat Gupta(Senior partner emeritus)Ian Davis(Senior partner emeritus)

Services Management consulting servicesRevenue $ 6.6 billion (est. 2009)[1]

AUM over $ 5 billion (MIO Partners)

Employees 17,000 (9,000 consultants)[2]

Website www.mckinsey.com

McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management.

Reliance Industries hires McKinsey for corporate restructuringRuchita Saxena, ET Now, Apr 13, 2011, 06.24pm ISTTags:

united states | Reliance Industries Ltd.

India's largest corporarte, Reliance Industries has hired business consultancy firm McKinsey to advice it on a business transformation plan which would catapult the company's enteprise value

by another $ 80 billion in the next 10 years. RIL will also take help from its independent director and former dean of Kellogg's management school Dipak Jain to chart out the new business reorganisation plan

Company Description

McKinsey & Company is one of the world's top management consulting firms. With roughly 90 offices in more than 50 countries around the globe, it serves three of the world's five largest companies and about two-thirds of the FORTUNE 1000. The company advises corporate enterprises, as well as government agencies, institutions, and foundations on a number of business practices. They include business technology, corporate finance, marketing and sales, operations, organization, risk, and strategy. McKinsey's consulting services focus on more than a dozen different industries, from automotive and banking to pharmaceuticals and telecommunications. Founded by James McKinsey in 1926, the firm is owned by its partners.

Top McKinsey & Company, Inc. Competitors

Bain & Company, Inc. Booz Allen Hamilton Holding Corporation The Boston Consulting Group Inc.

Financials

Company Type

PrivateHeadquarters

Fiscal Year-End

December

Employees 17,000

Executives

12 executives listed for McKinsey & Company, Inc.'s New York, NY location.

Global Managing Director Dominic Barton E-mail

Managing Director David Court E-mail

Chairman, Asia Gordon Orr

CASE STUDY OBJECTIVES

As a person with knowledge of Mckinsey and Co., the author has always brought

up to his superiors the viability of strategy formation regarding the analysis of this case

study and at times fail to understand the reasons or logic behind certain strategic

implementations imposed on it.

By delving into this project paper, the author intends to have better insights into

how business strategies of Mckinsey and Co. are thought up, formulated and then

imparted down into its subsidiaries. The author hopes to have an in-depth

understanding as to how the operations management of the company enables them to

compete effectively and profitably in this era of internationalization where competition is

extremely intense.

In order to reinforce the learning objectives, two key focal issues were focussed

upon i.e. innovation and diversity. Innovation was discussed with regard to the business

strategies of Mckinsey and Co. where they were renowned for their developmental

capabilities to constantly innovate. Diversity came under strategic thinking and

formation as the author considered the diverse culture, political climate, economic

surroundings, social environment, technological settings, government policies and legal

systems in order to better analyse the case of Mckinsey and Co.

 

 

EXECUTIVE BRIEF

This case study utilized McKinsey and Co. as the model organization to review

its present business strategies and how they dealt with critical situations. From the

analysis, key trends in the business strategies of the company were then identified, how

they worked and their effectiveness in dealing with critical situations was ascertained.

The paper then moved on to assess these business strategies of McKinsey and Co.

with regard to their suitability to critical situations, during which the internal capabilities

of these business strategies in relation to the strategy being followed was determined

also. An overall analysis of the performance and effectiveness of McKinsey and Co.

was also conducted to assess and compare the capabilities of their business strategies

with those of others. Gaps in the operations management capabilities and environment

of McKinsey and Co. were then identified.

Finally, several choices of strategies to improve the operations management of

McKinsey and Co. as effective means in critical situations were recommended and

evaluated in terms of appropriateness to the issues reviewed, feasibility in carrying out

the options and acceptability within the key stakeholders and decision makers. Several

key implementation issues related to managing strategic change were also addressed

as well.

 

 

ANALYSIS

1) What is Mckinsey's strategy for competing successfully in its chosen market?

Mckinsey and Co. aims for sustainable growth as a broad market leader in

management consultancy as well as for segment leadership. In both cases, the services

of Mckinsey and Co. will play a crucial part. The company is able to establish its broad

leadership usually by acquiring other strong management consultancy companies and

their services, which are then combined into a new, larger company. Offering training to

its employees, improving the company operations, and the introduction of new

technologies then reinforces the positions of the various products of Mckinsey and Co.

This practically results in economies of scale that is able to create a distribution network

for both the local and international consultancy services of Mckinsey and Co. If a market

is already in the control of other consultancy companies, Mckinsey and Co. devotes its

attention towards the development of a premium segment with its various services.

            The mission of Mckinsey and Co. is to secure the growth of its business in a

sustainable manner, while at the same time constantly improving the company’s

profitability. The strategy to achieve this involves four elements:

1. Striving in order to reach a leading position in attractive markets

2. Focusing on securing a competitive share of the market segments.

3. Working in order to improve the company’s efficiency and cut costs in operations.

4. Continuous growth through selective acquisitions for as long as they are able to

create shareholder value. 

Mckinsey and Co. Generic Strategy

Mckinsey and Company’s generic strategy in the management consultancy

market changed for the better at the start of the new millennium and began pursuing

service differentiation. True enough, the differentiated consultancy services of the

company were able to satisfy the needs of customers through a sustainable competitive

advantage. This allowed Mckinsey and Co. to desensitize the prices of their services

and instead focused on the values that generated not only a comparatively higher price

but also a better margin.

Figure 1. Porter's Generic Strategies (1989).

POSITIONING STRATEGY AND TACTICS

In order to sustain its growth on the international level, McKinsey and Co. builds

its business on four (4) main positioning strategies.

The first is building a strong local operating platform, and then testing it over time

to determine if profitable growth would be possible through the selection of the

right management consultancy services and creation of the structures for

distribution.

The second is broadening the portfolio in order to make way for international

consultancy services to give access to those not supported by the local services.

Global perspectives are also gathered to help optimize both the local and global

consultancy services. By broadening the portfolio, McKinsey and Co. is able to

meet the consumer’s needs and minimize the costs of local infrastructures.

The third positioning strategy involves a balanced portfolio of countries among

established and developing markets. In this instance, the established markets will

provide the funds to invest in developing markets that have lower GDPs but

possess a tremendous potential for growth and development (2002).

The last positioning strategy involves market consolidation which would help in

the securing of positions and the creation of shareholder values. McKinsey and

Co. strives to be in the top position on each market.

 

2) What behaviors, skills, and attitudes will the firm need from its people to

execute its strategy?

It is interesting to know the basic innate behaviours, skills and attitudes that the

employees of Mckinsey and Co. must possess in order to contribute towards the

development of their effective management consultancy image.

·        Mental Stability

Mental stability is crucial especially in the pursuit of the correct

management consultancy decision as well as the management and

development of the processes accompanying it. It is important for the

employees of McKinsey and Co. to remain updated with the latest

developments to be able to stay aware and knowledgeable in all issues.

·         Performance and Credibility

The production of their best management consultancy services and

outputs of McKinsey and Co. comes as a result of well-funded research

management and development activities regarding management

consultancy. The strong performance of their services and outputs in

the market could also be linked to the effective strategic planning and

human resource mobilization of the company. Thus, the company’s

credibility increases as their performance becomes better (2001).

·        Planning and Strategy Formation Capabilities

Planning and strategy formation nowadays has created the need for

McKinsey and Co. to become aggressive especially in the area of

marketing themselves. This is because the access to strong

distribution channels is critical for their continued popularity.

·        Decision-making abilities.

Upon arriving at the correct decision or choice, the consultants of

McKinsey and Co. now gains confidence in their ability to make critical

decisions or choices especially when their company’s integrity is on the

line. Thus, this consultant will now search for even more challenges

and opportunities where he / she could further enhance his / her

decision-making abilities regarding current issues in management

consultancy.

·        Holistic Mindset of Issues

Through the exposure to various puzzling management consultancy

issues, the consultants of McKinsey and Co. along the process are able

to develop a holistic mindset regarding the issues surrounding them.

The consultants now become a keen observer of the truths and lies

surrounding the issue being tackled, instead of relying on mere

hearsays. The continuous pursuit of the truth behind the puzzling

issues enables the consultants to consistently practice and enhance a

healthy and holistic mindset which makes it difficult for detractors to

give influence. Because of this holistic approach, the consultants of

McKinsey and Co. are able to effectively select the right choice and

continue to maximize this potential for future use.

3) How has the firm been growing so far?

McKinsey and Co. has been able to maintain its reputation as one of the

world's leading management consultancy companies for years now. It is able to

face the challenges in many of its markets directly. This is made possible by the

effective promotional and positional strategies aimed to deliver not only profit

growth, but also on building down the foundation of the company’s services and

business.

The promotional campaigns and strategies of McKinsey and Co. are

focused mainly on driving the growth of its services and improving the

company’s financial performance. These campaigns have also helped secure

significant acquisitions and partnerships. And more importantly, these

campaigns have led to the release of the potentials of the company’s

employees, thus building a quality performance- based culture (2002).

The promotional strategies of Mckinsey and Co.’s services are practically

reinforced by the local employees themselves. These moves certainly allow the

company to improve even more without the costs of introducing new

technologies. These efforts have resulted in increased financial gains for the

company and have allowed the establishment of distribution networks.

Because of these concerted efforts by McKinsey and Co., it has grown

and expanded virtually around the entire globe. This was also made possible by

their strong efforts to acquire smaller management consultancy firms from other

countries. Over the years and decades, McKinsey and Co. has slowly but surely

established a management consultancy empire, with strong segment markets

established in the Middle East, the Western Hemisphere, the Europe and most

recently the Asia Pacific.

In America for instance, McKinsey and Co. was able to achieve a broad

market leadership in management consultancy through various acquisition deals

over the years. The company also exerts efforts to communicate with their

customers in every local culture about their services and their impressions. And

this is no easy thing because Americans have different tastes and lifestyles.

This critical information gathered by McKinsey and Co. paves the way for them

to make the right decision regarding the appropriate strategies to pursue.

Heineken has even solidified its empire by adding India as one of its

markets in the Asia Pacific Region just recently. And this move is a sure sign

that there will be more acquisitions and mergers that McKinsey and Co. will be

involved in the coming years.

4) To what extent can competitors (BBCG, Mercer, Bain& CO etc.) duplicate

McKinsey's business model?

The competitors of McKinsey and Co. are slow to adapt to new technologies and

services that the company releases, therefore making it difficult for their competitors to

duplicate McKinsey’s business model.

How does the firm selects and motivates its professional?

A. Equal Opportunity and Employment Practices

 

1) McKinsey and Co. does not allow employment discrimination on the basis of race,

gender, religion, age, or against qualified disabled persons.

2) McKinsey and Co. does not allow the lowering of bona fide job requirements or

qualifications in order to give favor to any applicant for employment.

3) McKinsey and Co. does not allow all its employees, including, managers from taking

any grudge against any person making allegations of violations of the company policies.

B. Compensation and Benefits Management

McKinsey and Co. determines how it will implement the Compensation and

Benefits Management System which is the basis for ensuring the equitable

implementation of pay decisions. The Salary Administration Plan administers the

company’s internal compensation philosophy and policies, recruitment and selection

process, performance management, administration of pay practices, and program

evaluation plan. McKinsey and Co. regularly evaluates this plan to make sure that its

employees are continuously complying to the company policies as well as to the

company’s mission and organizational needs.

C. Management Development and Training

McKinsey and Co. provides various employee training sessions appropriate for

them to be able to help the company in achieving its mission and accomplishing its

objectives.

1. The company appoints an employee that is capable in helping to implement its

training and development programs and serving as coordinator for the duration of

training services.

2. The company develops a biennial training plan which includes:

a. a training needs assessment;

b. an action plan illustrating the objectives and approaches through which the plan can

possibly be done; and

c. funding needed to implement the plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

CONCLUSION

The results of the analysis carried out on the business strategies of McKinsey

and Co. indicated very significant effects, even amidst the threats of unrest. Therefore,

we could conclude that the business strategies of McKinsey and Co. could still be

expected to improve faster than average.

The review of the McKinsey and Co.’s operations management capabilities and

resources revealed very little inconsistencies regarding their business strategies. This is

coherent with their traditional inside-out approach. However, the need to reconcile both

the inside-out and outside-in approaches becomes imperative now for McKinsey and

Co.

The analysis of the environment as well as the needed behaviors, skills and

capabilities of the employees of McKinsey and Co. revealed certain gaps, most of which

are biased towards the environment. However, these gaps paved the way towards

determining a number of recommended strategic options to secure the competitiveness

of the company.

Also, the employees of McKinsey and Co. have to find a balance between

adherence to internal forces within the management and to the changing forces of the

environment in order to implement such strategic options.

Read more: http://ivythesis.typepad.com/term_paper_topics/2009/04/case-study-analysis-assignmentmckinsey-co.html#ixzz1KkGdNPMc

McKinsey has more than 95 offices in over 50 countries. Our consultants represent over 100 nationalities and speak more than 120 languages. Despite this wide range of nationalities and backgrounds, we operate as "One Firm" worldwide. That means we knit the benefits of our diversity into a unique global network unified by our values.

Our ValuesAdhere to the highest professional standardsImprove our clients' performance significantlyCreate an unrivaled environment for exceptional

people

InternationalityAs well as staffing projects on an international basis, McKinsey organizes conferences, training courses, and informal events on an international basis to support the development of an international culture and the establishment of a global network.

Diverse BackgroundsIn the Swiss office, diverse cultural backgrounds, very different professional backgrounds, and a broad range of interests form a significant part of the office's culture. By staffing projects internationally and giving our consultants the opportunity to work abroad, the Swiss office emphasizes the importance of building an international culture on the basis of diversity.

Working in TeamsYou will be working in teams with colleagues who have the broadest possible interests and academic and cultural backgrounds. Teams consisting of such diverse people as a political scientist with an M.B.A., a medical doctor, and a chemist are the rule rather than the exception. And because of our global staffing efforts, they will probably be from different offices or countries.

The McKinsey 7S FrameworkEnsuring that all parts of your organization work in harmony

© iStockphoto/Silense

How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study.

While some models of organizational effectiveness go in and out of fashion, one that has persisted is the McKinsey 7S framework. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful.

The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you:

Improve the performance of a company. Examine the likely effects of future changes within a company. Align departments and processes during a merger or acquisition. Determine how best to implement a proposed strategy.

The McKinsey 7S model can be applied to elements of a team or a project as well. The alignment issues apply, regardless of how you decide to define the scope of the areas you study.

The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

Hard Elements Soft Elements

Strategy Shared Values

Structure

Systems

Skills

Style

Staff

[[p[][mm"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.

The way the model is presented in Figure 1 below depicts the interdependency of the elements and indicates how a change in one affects all the others.

 

Let's look at each of the elements specifically:

Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to get the job done.

Shared Values: called "superordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the company.

Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements. The company's structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. The original vision of the company was formed from the values of the creators. As the values change, so do all the other elements.

How to Use the Model

Now you know what the model covers, how can you use it?

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change.

Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration.

You can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It's then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint.

Sounds simple? Well, of course not: Changing your organization probably will not be simple at all! Whole books and methodologies are dedicated to analyzing organizational strategy, improving performance and managing change. The 7S model is a good framework to help you ask the right questions – but it won't give you all the answers. For that you'll need to bring together the right knowledge, skills and experience.

When it comes to asking the right questions, we've developed a Mind Tools checklist and a matrix to keep track of how the seven elements align with each other. Supplement these with your own questions, based on your organization's specific circumstances and accumulated wisdom.

7S Checklist Questions

Here are some of the questions that you'll need to explore to help you understand your situation in terms of the 7S framework. Use them to analyze your current (Point A) situation first, and then repeat the exercise for your proposed situation (Point B).

Strategy:

What is our strategy? How do we intend to achieve our objectives? How do we deal with competitive pressure? How are changes in customer demands dealt with? How is strategy adjusted for environmental issues?

Structure:

How is the company/team divided? What is the hierarchy? How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision making and controlling centralized or decentralized? Is this as it should be, given

what we're doing? Where are the lines of communication? Explicit and implicit?

Systems:

What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage.

Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track?

Shared Values:

What are the core values? What is the corporate/team culture? How strong are the values? What are the fundamental values that the company/team was built on?

Style:

How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Are there real teams functioning within the organization or are they just nominal groups?

Staff:

What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies?

Skills:

What are the strongest skills represented within the company/team? Are there any skills gaps? What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed?

7S Matrix Questions

Using the information you have gathered, now examine where there are gaps and inconsistencies between elements. Remember you can use this to look at either your current or your desired organization.

Click here to download our McKinsey 7S Worksheet, which contains a matrix that you can use to check off alignment between each of the elements as you go through the following steps:

Start with your Shared Values: Are they consistent with your structure, strategy, and systems? If not, what needs to change?

Then look at the hard elements. How well does each one support the others? Identify where changes need to be made.

Next look at the other soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change?

As you adjust and align the elements, you'll need to use an iterative (and often time consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it.

Its list of clients includes General Motors, PepsiCo, Ford Motor Company, and American Express. Many former McKinsey consultants have gone on to hold high management positions in major companies around the world.

McKinsey opened offices in France, Germany, Switzerland, Belgium, Italy, the Netherlands, and Scandinavia, and worked with major

European clients such as KLM and Royal Dutch/Shell. More recently, it has opened offices in Japan and Australia.

Will Rajat Gupta Destroy McKinsey?

Rajat Gupta stands accused of violating insider trading rules by leaking confidential information about two companies—Procter & Gamble [PG   63.85     0.55   (+0.87%)   ] and Goldman Sachs [GS   152.144     -1.126   (-0.73%)   ]—on whose board’s he was serving. So far a lot of the public attention has been focused on Gupta’s roles at Goldman and P&G.