McKinsey and the Globalization of Consultancy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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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 - – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, technology disruption, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
Strong track record of project management
– Mckinsey Mckinsey's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Analytics focus
– Mckinsey Mckinsey's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Geoffrey G. Jones, Alexis Lefort can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
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.
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.
Innovation driven organization
– Mckinsey Mckinsey's is one of the most innovative firm in sector. Manager in McKinsey and the Globalization of Consultancy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Mckinsey Mckinsey's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mckinsey Mckinsey's to keep acquiring new customers and building profitable relationship with both the new and loyal 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.
Effective Research and Development (R&D)
– Mckinsey Mckinsey's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study McKinsey and the Globalization of Consultancy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 -
High operating costs
– Compare to the competitors, firm in the HBR case study McKinsey and the Globalization of Consultancy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mckinsey Mckinsey's 's lucrative customers.
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.
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.
Products dominated business model
– Even though Mckinsey Mckinsey's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - McKinsey and the Globalization of Consultancy should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Mckinsey Mckinsey's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study McKinsey and the Globalization of Consultancy, is just above the industry average. Mckinsey Mckinsey's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Mckinsey Mckinsey's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Mckinsey Mckinsey's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study McKinsey and the Globalization of Consultancy, it seems that the employees of Mckinsey Mckinsey's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mckinsey Mckinsey's can use these opportunities to build new business models that can help the communities that Mckinsey Mckinsey's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mckinsey Mckinsey's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
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.
Leveraging digital technologies
– Mckinsey Mckinsey's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Mckinsey Mckinsey's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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 -
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.
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.
Technology acceleration in Forth Industrial Revolution
– Mckinsey Mckinsey's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mckinsey Mckinsey's needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Mckinsey Mckinsey's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Mckinsey Mckinsey's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 .
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.
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.
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.
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.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Mckinsey Mckinsey's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study McKinsey and the Globalization of Consultancy, Mckinsey Mckinsey's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.