Businessmodel of McKinsey & Company

Customer Segments

McKinsey has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at businesses, non-profits, governments, and non-governmental organizations desiring management consulting services.

Value Proposition

McKinsey offers two primary value propositions: innovation and brand/status.

The company places a strong emphasis on innovation. It maintains New Ventures, a group focused on generating innovations and incorporating them into client work. The team includes over 800 data scientists and analysts, as well as software engineers, mathematicians, entrepreneurs, and implementation experts. Thus far, it has developed 35+ solutions, including Growth Tech, McKinsey Implementation, and Recovery & Transformation Services, all originating from small projects.

The company has established a powerful brand as a result of its success. It is widely viewed as the world’s most prestigious management consulting firm. It maintains over 10,000 consultants and almost 2,000 research and information professionals. It has 110+ global offices serving 80% of the world’s largest firms and an extensive list of non-profits and governments. Lastly, more former and current Fortune 500 CEOs are alumni of McKinsey than of any other corporation. They include Facebook COO Sheryl Sandberg, Google CEO Sundar Pichai, and Morgan Stanley CEO James Gorman.

Channels

McKinsey’s acquires new consulting projects via the relationships built by their partners. The company promotes its offering through its social media pages and participation in various conferences.

Customer Relationships

McKinsey’s customer relationship is primarily of a dedicated personal assistance nature. Customers receive in-person assistance from staff members as part of consulting engagements. That said, there is a self-service component. The company’s website features numerous self-help resources, including articles, reports, eBooks, podcasts, and answers to frequently asked questions.

Key Activities

McKinsey’s business model entails designing and developing problem-solving offerings for clients.

Key Partners

McKinsey maintains the following partnership programs:

McKinsey Solutions – The company works with firms that own data and startups that analyze data in innovative ways to develop solutions that address important issues for clients. Specific partners include ClickFox, Henry Rak Consulting Partners (HRCP), and Finalta.

Social Impact Partnerships – The company collaborates with various types of institutions to tackle major societal issues that impact its clients. Specific partnerships include the following:

• World Economic Forum – McKinsey works with the organization to promote innovative thinking on important global issues such as energy sufficiency and digital media.
• Focusing Capital on the Long Term (FCLT)– McKinsey works with investment management organizations to generate practical solutions for significant short-termism by investors and firms.
• New Climate Economy – McKinsey works with this organization to conduct research on the benefits and costs of climate action in order to help businesses prioritize their responses.
• CDP (Carbon Disclosure Project) – McKinsey works with cities and companies to measure and publicize their environmental information and put it at the center of decision-making efforts.
• UN Women – McKinsey works with this council to offer advice to organizations on furthering economic empowerment for women, in the workplace and otherwise. ### Key Resources

McKinsey’s main resources are its human resources. Its consultants come from a wide range of backgrounds, and include medical doctors, business managers, engineers, civil servants, research scientists, and entrepreneurs. They lend their insight across 22 industries and 12 business areas. Beyond consultants, it maintains the following groups of core employees:

Digital Labs – This team includes technologists who build custom software and apps, develop rapid prototypes, and incorporate recommendations into clients’ current technology platforms.

McKinsey Analytics – This team includes data experts who develop and operate advanced data models that enable customers to create insights and make stronger, faster decisions.

McKinsey Recovery & Transformation Services – This team includes turnaround executives from a wide variety of industries who help guide failing businesses back to long-term health.

Cost Structure

McKinsey has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of customer support and operations and research and development, both fixed costs.

Revenue Streams

McKinsey has a single revenue stream, the fees charged to its clients for its range of services. These fees vary by type of client and individual project.