Businessmodel of Marsh & McLennan Companies

Customer Segments

MMC has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at firms of all sizes and industries.

Value Proposition

MMC offers three primary value propositions: accessibility, customization, and brand/status.

The company creates accessibility by providing a wide variety of options. It operates four subsidiaries that present a broad range of services. These are Marsh, which offers insurance broking and risk management services; Guy Carpenter, which provides risk and reinsurance intermediary services; Mercer, which offers talent, health, retirement, and investment consulting services; and Oliver Wyman, which offers management consulting services.

The company enables customization by tailoring its services. Its Marsh & McLennan Agencies division operates a hub and spoke structure, allowing decentralized leadership in its various regions so that clients can benefit from localized expertise (called a “local touch”). It also works to extend its regional capabilities by acquiring partner firms in nearby cities.

The company has established a strong brand due to its success. It employs 60,000 people worldwide and generates annual revenues of $13 billion. It is one the largest insurance brokers in the world in terms of revenues. It serves clients in over 130 countries. Its Marsh & McLennan Agency division is the12th largest insurance broker in the United States, with annual revenues of $900 million. Lastly, it has won many honors, including the following:

• Recognition by Institutional Investor Magazine as a member of its 2017 All-America Executive Team, as having the #3 Overall CEO in the insurance industry, as being #3 with buy-side analysts, and as being #2 with sell-side analysts
• Ranking 29th on the 2012 Bloomberg Businessweek 50, an annual ranking of the S&P 500’s top 50 performing companies ### Channels

MMC’s main channel is its business development team. The company promotes its offering through its website, social media pages, and participation in conferences.

Customer Relationships

MMC’s customer relationship is primarily of a dedicated personal assistance nature. It works closely with clients in order to help them with their risk, strategy, and people strategies. That said, there is a self-service component. The company’s website features an “Insights & Analysis” section that includes reports and white papers.

Key Activities

MMC’s business model entails designing, developing, and delivering it services to customers.

Key Partners

MMC’s key partners are the suppliers that provide the products and services it needs to manage its operations. The company’s Marsh & McLennan Agency subsidiary partners with privately held brokers throughout the U.S. and helps them operate strategies within their respective markets. It also shares best practices from other MMA partner firms.

Key Resources

MMC’s main resources are its human resources, namely its network of 60,000 consultants and experts in risk, strategy, and people services worldwide.

Cost Structure

MMC has a value-driven structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely cost of services. Other major drivers are in the areas of compensation/benefits expenses and operating expenses.

Revenue Streams

MMC has one revenue stream: revenues it generates from contracts signed for the provision of its professional services.