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McKinsey And Company Managing Knowledge And Learning Case Solution
McKinsey is one of the leading consultant management company with a global presence. Company has stood the test of time and has decades of experience in a wide variety of sectors. The advancement in technology, economic crisis, and increasing competition in the industry has laid pressure on the company. This report is an analysis of the company from internal and external perspectives. Divided into sub-sections, the reports cover the historical background as the well current position of the company. The internal and external factor evaluation is done using various matrices. Financial analysis, industry analysis are done using the example of one major competitor. TWOS and QSPM have been used for assessing the possibilities for the company. Some recommendations have been given in the en after future scenario analysis.
Following questions are answered in this case study solution:
Company’s current Operations
The Company’s Generic Strategies
Major Strategic Issues
Case Study Questions Answers
McKinsey was founded in 1995 by the University of Chicago professor James O McKinsey. The company has a long history of market leadership in the management consulting industry and has a global presence (Mc Kinsey & Company, 2021). The company started with the vision to provide consultation to business for building better future. The core competency of the company was to provide insights about improving efficiency through its experts. The company progressed by leaps and bounds in the earlier decades of its foundation and builds a strong market reputation. After a decade of incorporation, the company faced issues because of global economic crises, technological problems, and increasing competition from the market. The core principles of the company have focused on building better teams and serving its clients through its knowledge and expertise.
In response to changing business dynamics, the company has changed its internal infrastructure to more specialized units rather than relying on general strategists. The core competency of the company was building client relations in addition to its knowledge management systems. As a result of its expertise, it witnessed tremendous growth and grew its locations as well as active engagements (Exhibit A). Company has been functional in many industries and has built specialized centers for knowledge management to provide its personnel insights about all core business functions and major industries.
3. Core Business
Company’s core business is management consulting which helps other businesses to improve their performance and efficiency through a wide variety of functions. Every business function from finances to supply chain management falls under the category of performance optimization. The management consulting business has evolved to become highly sophisticated over the passage of time. With the development of technology, the procedures have become highly specific and specialized.
The purpose of management consulting is to not only provide insights or recommendations to the client problems rather to develop an entire procedure and help with the implementation of the new action plan. These firms deal with the tough issues that are required to face in order to implement corrective actions within organizations. They cater the problems like a conflict of interest, the company’s lack of understanding or expertise in developing the right action plan and facilitate their learning.
The global management consulting industry is growing although the majority of the share is of developed countries. Western nations constitute the majority of the market share in consulting business with the USA has the largest share in the pie with 71.2 billion USD (Statista, 2021). It is one of the largest and mature markets in professional services with high specialization.
4. Company’s current Operations
Company is associated with the business of management consulting. Company provides consultation on strategic management to its clientele which include, governments and multinational organizations (Mc Kinsey & Company, 2021). The company has separate services for small and, medium-sized enterprises. It provides consultancy on issues like design leadership and cost management across different industries.
i. Marketing and Sales
The marketing center of the company is built by Stephen Dull who has wide experience in consumer and industry marketing. McKinsey provides solution son both B2B and B2C segments and includes the areas of digital marketing, sales experience consumer branding, etc. (Mc Kinsey and Company, 2021) The marketing and sales department of the company is associated with providing insights on consumer analytics, using the big data for companies benefit and providing Marketing and Sales implementation strategies to its clients.
The production and operation at McKinsey revolved largely around the concept of prod using the generalists which would cater to the companies in solving their problems. In order to meet the demands of sophisticated clients the company later evolved its business model into categorized units which are based on client sector or industry. The company relies on its internal network and resources for solution finding (Mc Kinsey & Company, 2021). The two main working groups of the company are strategy and organization. The internal operation structure of the company is based on creating a database of knowledge and leverage it.
Corporate Finance is one of the core competencies of the company. Mc Kinsey published regular articles on Corporate Finance to raise awareness and understanding about Finance related issues. The research and insights provided by the MC Kinsey consultants help the clients to get access to market intelligence using data analytics. From portfolio allocation to strategies of divestitures the company provides its services for a financial consultation. The asset allocations and valuation, analysis from the buy side or sell side perspective are also done by the company (Mc Kinsey & Company, 2021).
McKinsey has been working on internal restructuring in response to changing client needs throughout the passage of its time. As part of its commitment to provide better solutions to the clients, the company has moved from a T-shaped generalist structure to I shaped specialist structure. The company has built competence centers and a Clientele and a Professional development committee (CPDC). The company has also innovated its internal structure to offer multiple career paths to its employees. The biggest innovation of the company is building its internal resource pool for knowledge which has a plethora of publications including PD net and a pocket-size handbook for the ready access to internal knowledge and resources for associates.
v. Human Resources Personnel
McKinsey is working on the principles of specialized knowledge and offers a career rewarding career path for its personnel. As a part of its restructuring process, the company has moved from T shape consultants to I shape consultants. Instead of providing general consultations the company has moved towards a more narrow consultation procedure and has aligned its human resource management with the new organizational structure. McKinsey is facing challenges in personnel management especially the job descriptions, functionalities, and reward management because of multiple career path structures in the company. It has blurred the boundaries for management.
The internal structure of McKinsey relies heavily on its centralized knowledge base and connections. People tend to look inward the company for gaining insights through the shared database and relies on the internal network which has expanded all over the globe for connecting with other experts. The company has learned to integrate new technologies and has used them to expand its database and knowledge centers which are highly specialized. Multiple networks and internal resources are used by associates for problem-solving (Exhibit 5). These internal resources are among the key resources of the company.
5. The Company’s Generic Strategies
The competitive advantage of the company came from its experience and expertise. While the company is focused on creating differentiated services through its strategy of building relationships with the clients. The competitive advantage of the company comes from its unique insights and its research and organizational relationships. The global relationships of the company have also added value to its existing network. One of the most important, widely used, and differentiated models used by the company is the famous 7 s model. It provides insights on the organizational resources by dividing them into hard and soft skills combined with the shared values of the company. Any business can gain insights to improve its strategic operations by focusing on either hard or soft elements. The framework helps in identifying the gaps in resources and competencies that are required for the strategic management of the company and is considered a valuable tool for strategic analysis (Kukreja, 2021). The differentiation strategy of the company is, however, not for its product or services rather its way of doing the business.
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