McKinsey Method. How to solve any problem. “The McKinsey Method. Using the Techniques of Leading Strategic Consultants to Solve Personal and Business Challenges Ethan Rasiel The McKinsey Method How to Solve Any Problem

GE Matrix, or McKinsey Matrix is used to assess the attractiveness of individual strategic economic units on the basis of two coordinates: the X-axis characterizes the strength of the position of a strategic economic unit in the industry, the Y-axis — the industry attractiveness. Each of these coordinates is determined taking into account several parameters.

McKinsey Matrix was developed for General Electric. The X axis is the competitive position (relative advantage) of the strategic business unit, the Y axis is the attractiveness of the industry in which the strategic business unit operates. Each axis is divided into three parts. The matrix has a dimension of 3 * 3. In contrast to the BCG, in this matrix, each coordinate axis is considered as a multivariate dimension axis. The McKinsey matrix is \u200b\u200bmore realistic. Indicators on the Y axis are practically beyond the control of the company, on the X axis, on the contrary, can be changed (Table 6.1).

For X axis - competitive advantages of the business area.

1. We will identify the key success factors for each business area.
2. The specific weight (relative importance) of each factor.
3. We put an assessment for each factor. 5 - if the product has a very strong competitive position in a similar industry, 1 - if the competitive position is very weak.

For Y-axis - the attractiveness of the business area as an industry.

The algorithm is similar.

Let us select the parameters by which the attractiveness of the industry will be assessed.

The analysis using the McKinsey matrix gives a good analysis of the product portfolio.

The analyzed business units are displayed as circles with centers at the intersection of their respective values. Each circle corresponds to the total volume of sales in a certain market (Fig. 6.2).

Three areas are formed:

• winners;
• losers;
• middle area (diagonal).

The basic principle of the method - increase investments in business areas in attractive industries if the company has competitive advantages in them, and, conversely, reduce investments if the position of the product market itself or the company on it turns out to be weak. You can assess the contribution of a product to a company's profitability.

For winners - additional investments, we will get profit, protection of advantages. For the losers - limit investments to the point of stopping, additional investments will not bring profit. For border areas - either grow or shrink until liquidation.

Position strength index is based on the indicator of the relative market share, the dynamics of its change, the amount of profit, image, the degree of price competitiveness, product quality, sales efficiency, geographical advantages of the market, and employee performance. Weighing of the used indicators is possible. Three levels of gradation of this index are accepted: strong, medium, weak. The industry attractiveness index is determined taking into account the size and variety of markets, the rate of market growth, the number of competitors, the industry average profit, the cyclicality of demand, the structure of industry costs, pricing policy, legislation, labor resources... Three levels of gradation of this index are used: high, medium and low. The intersection of lines characterizing different levels of values \u200b\u200bof these two levels forms a grid, which is divided into three zones: the zone in which the organization must invest; the zone in which the organization must maintain investments at the same level, and the zone in which it is necessary to obtain the highest possible profit, after which it should be abandoned.

The strategies recommended for individual lattice squares can be summarized as follows:

1. Maintaining and strengthening the market position by:

• investing to ensure growth as fast as possible;
• concentration of efforts to maintain strengths.

2. Investing in the struggle for leadership; selective investment in the strengths of the business; strengthening the most vulnerable sides of the activity.

3. Ensuring selective growth by:

• specialization based on the strengths of the activity;
• search for ways to overcome the weaknesses of the activity;
• leaving the market if there are no indications of acceptable growth in sales.

4. Large investments in the most attractive market segments; maintaining the ability to resist competitors; ensuring high profitability by increasing.

5. Protection of existing programs of market activities; concentration of investments in segments where profitability is high and risk is relatively low.

6. Limited expansion, or “harvesting,” is ensured by finding ways to expand non-high-risk activities, while minimizing investment and rationalizing all value chains.

7. Maintaining a position by refocusing activity by:

• shifting the focus on making current money;
• concentration on attractive segments;
• protecting the strengths of the business.

8. The main focus is on making money by:

• protecting positions in the most profitable segments;
• modernization of the product line;
• minimization of investments.

9. Leaving with. In this case, it is necessary:

• sell goods on time at a favorable price;
• drastically reduce fixed costswhile avoiding investing.

McKinsey Method. Using the techniques of leading strategic consultants to solve personal and business problems Ethan Rasiel

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Title: McKinsey Method. Using the techniques of leading strategic consultants to solve personal and business problems
By Ethan Rasiel
Year: 2012
Genre: Management, recruiting, Corporate culture, Foreign business literature

About the book “The McKinsey Method. Using the Techniques of Leading Strategic Consultants to Solve Personal and Business Challenges. ”Ethan Rasiel

Today in the world there is no other such well-known, successful and in-demand consulting firm as McKinsey & Company. Most of the world's leading corporations are its clients. Many of the greatest business leaders and management thinkers have emerged from this company. Among them are Tom Peters, Louis Gerstner, Jon Katzenbach and many others.

The book reveals for the first time the management practices that McKinsey has carefully guarded for a long time, and demonstrates the tools that enable managers of all levels to think like McKinsey consultants and find solutions to their toughest business problems.

This work will be useful not only for representatives of consulting companies and business school students, but also for all those who solve business problems.

On our site about books, you can download the site for free without registration or read online book “The McKinsey Method. Using the techniques of leading strategic consultants to address personal and business challenges. ”Ethan Rasiel at epub formats, fb2, txt, rtf, pdf for iPad, iPhone, Android and Kindle. The book will give you a lot of pleasant moments and real pleasure from reading. You can buy the full version from our partner. Also, here you will find last news from the literary world, learn the biography of your favorite authors. There is a separate section for aspiring writers with useful tips and recommendations, interesting articles, thanks to which you yourself can try your hand at literary skill.

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The McKinsey Method unveils the management approaches and methods that McKinsey has carefully guarded for a long time, and demonstrates the tools that enable managers of all levels to think like McKinsey consultants and find solutions to their toughest business problems. Today in the world there is no other such well-known, successful and demanded consulting firm as McKinsey & Company.

Why The McKinsey Method Is Worth Reading

If you are the CEO of a company that seeks help from McKinsey or another consulting firm, this book will give you an idea of \u200b\u200bwhat these strange people are doing. Although each consulting firm has its own methods of work, the essence of management consulting is the same everywhere - it is an objective view of the client's situation. It is possible that other firms operate very differently from McKinsey, but the mindset of their consultants is similar.

Who is the author of The McKinsey Method?

Ethan Rasiel joined McKinsey in 1989 and worked there until 1992. His clients were large companies from finance, telecommunications, IT and consumer products. In addition, Rasiel has worked as an investment banker and asset manager. He holds a BA from Priston University and an MBA from Wharton School of Business.

About McKinsey

James O. McKinsey & Company was founded in 1926 by James O. McKinsey in Chicago. James McKinsey is a professor of accounting at the University of Chicago Business School who pioneered the use of financial planning as a management tool. Marshal Field's became his first client in 1935 and soon convinced McKinsey to leave his own firm and become one. director general... In 1937, McKinsey died suddenly of pneumonia.

Marvin Bauer, who joined the firm in 1933, and became McKinsey's successor, foresaw the firm's success on the world stage and laid down its core principles. The Chicago and New York branches split from the firm when McKinsey died. In 1939, with the help of New York partners, Bauer rebuilt the firm's New York office and renamed it McKinsey & Company. One of the firm's early partners, Andrew T. Carney, retained the firm's Chicago office and renamed it after his own name, thus establishing a rival firm A.T. Kearney, a management consulting firm.

Today McKinsey has 94 offices in more than 60 countries around the world.

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