McKinsey and the Globalization of Consultancy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of McKinsey and the Globalization of Consultancy
Considers McKinsey's strategy during the first stage of the globalization of the management consultancy industry between the 1950s and 1973. Briefly reviews the history of management consulting before considering the factors that led McKinsey to open its first international office in London in 1959. Describes the subsequent rapid international growth of McKinsey and its leading competitors and their role in diffusing American management concepts worldwide. By 1973, however, McKinsey's new managing director faced evidence that the global demands for such services was in decline, in part because the American management model was becoming less attractive.
Swot Analysis of "McKinsey and the Globalization of Consultancy" written by Geoffrey G. Jones, Alexis Lefort includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mckinsey Mckinsey's facing as an external strategic factors. Some of the topics covered in McKinsey and the Globalization of Consultancy case study are - Strategic Management Strategies, Entrepreneurship, Globalization, Knowledge management, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the McKinsey and the Globalization of Consultancy casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, etc
Introduction to SWOT Analysis of McKinsey and the Globalization of Consultancy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in McKinsey and the Globalization of Consultancy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mckinsey Mckinsey's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mckinsey Mckinsey's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of McKinsey and the Globalization of Consultancy can be done for the following purposes –
1. Strategic planning using facts provided in McKinsey and the Globalization of Consultancy case study
2. Improving business portfolio management of Mckinsey Mckinsey's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mckinsey Mckinsey's
Strengths McKinsey and the Globalization of Consultancy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mckinsey Mckinsey's in McKinsey and the Globalization of Consultancy Harvard Business Review case study are -
Ability to recruit top talent
– Mckinsey Mckinsey's is one of the leading recruiters in the industry. Managers in the McKinsey and the Globalization of Consultancy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the McKinsey and the Globalization of Consultancy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Mckinsey Mckinsey's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in McKinsey and the Globalization of Consultancy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Mckinsey Mckinsey's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mckinsey Mckinsey's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Mckinsey Mckinsey's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Successful track record of launching new products
– Mckinsey Mckinsey's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mckinsey Mckinsey's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Mckinsey Mckinsey's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Strategy & Execution industry
– McKinsey and the Globalization of Consultancy firm has clearly differentiated products in the market place. This has enabled Mckinsey Mckinsey's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mckinsey Mckinsey's to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Mckinsey Mckinsey's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in McKinsey and the Globalization of Consultancy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Mckinsey Mckinsey's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Mckinsey Mckinsey's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Mckinsey Mckinsey's is present in almost all the verticals within the industry. This has provided firm in McKinsey and the Globalization of Consultancy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Mckinsey Mckinsey's in the sector have low bargaining power. McKinsey and the Globalization of Consultancy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mckinsey Mckinsey's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses McKinsey and the Globalization of Consultancy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of McKinsey and the Globalization of Consultancy are -
Skills based hiring
– The stress on hiring functional specialists at Mckinsey Mckinsey's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Mckinsey Mckinsey's supply chain. Even after few cautionary changes mentioned in the HBR case study - McKinsey and the Globalization of Consultancy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mckinsey Mckinsey's vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Mckinsey Mckinsey's products
– To increase the profitability and margins on the products, Mckinsey Mckinsey's needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As McKinsey and the Globalization of Consultancy HBR case study mentions - Mckinsey Mckinsey's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Mckinsey Mckinsey's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study McKinsey and the Globalization of Consultancy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the McKinsey and the Globalization of Consultancy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Mckinsey Mckinsey's has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Geoffrey G. Jones, Alexis Lefort suggests that, Mckinsey Mckinsey's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Mckinsey Mckinsey's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Mckinsey Mckinsey's, firm in the HBR case study McKinsey and the Globalization of Consultancy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Mckinsey Mckinsey's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities McKinsey and the Globalization of Consultancy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study McKinsey and the Globalization of Consultancy are -
Better consumer reach
– The expansion of the 5G network will help Mckinsey Mckinsey's to increase its market reach. Mckinsey Mckinsey's will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Mckinsey Mckinsey's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Mckinsey Mckinsey's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mckinsey Mckinsey's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Mckinsey Mckinsey's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Mckinsey Mckinsey's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mckinsey Mckinsey's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, McKinsey and the Globalization of Consultancy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mckinsey Mckinsey's is facing challenges because of the dominance of functional experts in the organization. McKinsey and the Globalization of Consultancy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Mckinsey Mckinsey's has opened avenues for new revenue streams for the organization in the industry. This can help Mckinsey Mckinsey's to build a more holistic ecosystem as suggested in the McKinsey and the Globalization of Consultancy case study. Mckinsey Mckinsey's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Mckinsey Mckinsey's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Using analytics as competitive advantage
– Mckinsey Mckinsey's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study McKinsey and the Globalization of Consultancy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mckinsey Mckinsey's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mckinsey Mckinsey's in the consumer business. Now Mckinsey Mckinsey's can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mckinsey Mckinsey's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Mckinsey Mckinsey's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats McKinsey and the Globalization of Consultancy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study McKinsey and the Globalization of Consultancy are -
Stagnating economy with rate increase
– Mckinsey Mckinsey's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Mckinsey Mckinsey's business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mckinsey Mckinsey's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Mckinsey Mckinsey's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Mckinsey Mckinsey's in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Mckinsey Mckinsey's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Shortening product life cycle
– it is one of the major threat that Mckinsey Mckinsey's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mckinsey Mckinsey's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Mckinsey Mckinsey's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mckinsey Mckinsey's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Mckinsey Mckinsey's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mckinsey Mckinsey's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study McKinsey and the Globalization of Consultancy .
Weighted SWOT Analysis of McKinsey and the Globalization of Consultancy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study McKinsey and the Globalization of Consultancy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study McKinsey and the Globalization of Consultancy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study McKinsey and the Globalization of Consultancy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of McKinsey and the Globalization of Consultancy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Mckinsey Mckinsey's needs to make to build a sustainable competitive advantage.
