The McKinsey Way
Ethan M. Rasiel
Gaurav Rathi (09016)
Priyadarshini N (09035)
02/19/10 1
2
Agenda
The McKinsey way
Problem solving process
The Toyota way
Hypothesis testing
80/20 rule
Indian examples
02/19/10 3
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
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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
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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
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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
1. Initial Problem Perception
(large, Vague, Complicated Problem)
2. Clarify the Problem
The “Real” Problem
3. Locate
Grasp the Area/Point
Situation of Cause
POC Basic Cause and Effect
Why? Investigation
Direct Cause
Why?
Cause
Why?
Cause Why?
Cause 4. Five (5) Why? Investigation
Of Root Cause
Investigation Why? Cause
Cause
Root Cause
5. Countermeasure
6. Evaluate
7. Standardize
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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
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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
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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
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Tata Ace
Mini truck
Launched in may 2005
Robust sales figure which no one
was expecting
Competitors
Bajaj auto
Mahindra
Piaggio
Force motors
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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
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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"
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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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H e a lt hy, T h in k Better
Eat
18
Britannia Milk Products
Entered into milk products in 1997
Launched with Britannia Milkman
Formed joint venture with Fonterra
Exited from milk segment in 2004
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Why did they fail??
Rise in milk prices
No streamlined sourcing of milk
Price fluctuations
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Re-entry into the milk
segment
Britannia Actimind
Re-entry with the launch of probiotic
milk drink
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Britannia Actimind
Britannia Industries Ltd
A vitamin fortified drink
Mainly for children
Help memory
Iodine content increase mental
development
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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
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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
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Summary
McKinsey & Company
The McKinsey Way
The Toyota Way
Tata Ace
Britannia Actimind
80/20 rule
Hypothesis testing
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