The McKinsey Way

Saturday 8 April 2023 1

The McKinsey WayEthan M. Rasiel

Gaurav Rathi (09016)Priyadarshini N (09035)

2


Agenda

The McKinsey way

Problem solving process

The Toyota way

Hypothesis testing

80/20 rule

Indian examples


McKinsey & Company

Global management consulting firm Widely recognized as a leader One of the most prestigious firms in the

management consulting industry 8,700 consultants in 90 consulting offices

across 50 countries Competes most directly with Boston Consulting

Group (BCG), Booz & Company and Bain & Company on client engagements


The McKinsey Way

The McKinsey Way of thinking about

problems, their way of working to

solve these and of course how to sell

the solution

Each project is called an

engagement

Process of problem solving into

various steps in an McKinsey-ite

during engagement


Problem solving process

Step 1: Frame the problem

Build the problem based on facts

Start with the hypothesis

Step 2: Approach to the problem

Develop an approach to your problem

Keep the approach as simple as possible

Progress steadily and use your learning


Problem solving process - Contd Step 3 : Team Work

Assemble your team with the right mix of members

Bring it together Interact with your client Brainstorm

Step 4: Selling your solutions Presentations Be crisp and clear Maintain Confidentiality

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The Toyota Way

Direct Cause

Cause

Cause

Cause

Cause

1. Initial Problem Perception(large, Vague, Complicated Problem)

2. Clarify the Problem

The “Real” Problem

3. Locate Area/Point of Cause

POC

Grasp the Situation

Cause Investigation

Why?

Why?

Why?

Why?

Why?

Basic Cause and EffectInvestigation

4. Five (5) Why? InvestigationOf Root Cause

Root Cause

5. Countermeasure

6. Evaluate

7. Standardize


Hypothesis testing

Improve the quality of process

Uses statistical method like

hypothesis testing

Six sigma hypothesis

Testing by various tests such as chi-

square etc

HCL, Wipro


80/20 Rule

AIRTEL and other telecom company

80% of their revenue come from

20% of customers

Quite shocking but true

Rest most of the customers are

passive customers


80/20 Rule – Contd…

They use services just for incoming

facility or few calls

This rule helps the company to form

its strategies accordingly

Investor

80% of his profit is due to 20% of stocks

13


Tata Ace

Mini truck Launched in may 2005 Robust sales figure which no one was

expecting Competitors

Bajaj auto Mahindra Piaggio Force motors


Tata Ace –Contd…

New mini segment

Challenged the government policy

Price of 3 wheelers – 1.75 lakhs

Price of Tata Ace – 2.25lakhs to 2.35

lakhs

Converted lot of 3 wheelers users to

4 wheelers users


The magical idea of Tata Ace

Girish Wagh, a 34-year-old divisional manager,

designed Ace

In June 2007 Tata Motors has also launched the

passenger variant of ACE, named MAGIC

India’s first Maxivan - The Tata Winger, which

an entirely new platform

Objective is "to change the way an average

Indian travels"


Designing Tata Ace

Step 1: Blue print for Tata Ace Analysis of data from market research

Step 2: Approach to the key problem areas identified by market

research Step 3:

The engineers came together to develop the model of Tata Ace

Prototyping and tooling Step 4:

Catered to the latent need in the market

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Eat Healthy, Think Better


Britannia Milk Products

Entered into milk products in 1997

Launched with Britannia Milkman

Formed joint venture with Fonterra

Exited from milk segment in 2004


Why did they fail??

Rise in milk prices

No streamlined sourcing of milk

Price fluctuations


Re-entry into the milk segment

Britannia Actimind

Re-entry with the launch of probiotic

milk drink


Britannia Actimind

Britannia Industries Ltd

A vitamin fortified drink

Mainly for children

Help memory

Iodine content increase mental

development


Strategy for the re-launch

Step 1: Analysis of the failure

The causes of failure in 2004 were due to

price fluctuations and no streamlined

sourcing of milk

Step 2: Approach for the re-launch

The key problem areas were identified

along with opportunities


Strategy for the re-launch – Contd…

Step 3: Solutions to the problems identified

Launch with the emerging flavoured milk

products

Cater to the health need

Step 4: Marketing Actimind

Launch in cities in Tamil Nadu

Giving competition to other players in the market


Summary

McKinsey & Company

The McKinsey Way

The Toyota Way

Tata Ace

Britannia Actimind

80/20 rule

Hypothesis testing

Thank you!!

Documents

The McKinsey Way