We discussed the SWOT Analysis of consultancy company Accenture in our last blog post. In this blog, we will conduct a detailed SWOT analysis of McKinsey, a similar consultancy company.
The McKinsey Company is a leading global management consulting firm. Their clients including the world’s leading businesses, governments, and institutions are enjoying sustainable growth with the support of McKinsey. As a global management consulting firm and the oldest plus largest of the big three in management consultancies, they provide services worldwide.
The company is in a marketing position due to its inclusive marketing efforts. Even the world and companies have moved to digital. To know more about the changing scenario of marketing, join our Free MasterClass on Digital Marketing 101 by the CEO and founder of IIDE, Karan Shah.
Do you want to know how McKinsey became successful? In this blog, we will get to learn about the SWOT analysis of McKinsey. Before proceeding further let us just know more about McKinsey as a company.
About McKinsey,
(James O. McKinsey – The Founder of McKinsey, Source: Wikipedia)
McKinsey & Company is a leading global management consulting firm founded in 1926 by James O. McKinsey. Business leaders, governments, and institutions search them for expert strategic management advice.
Since 1926, when James O. McKinsey, a University of Chicago professor, opened a Chicago consulting office, McKinsey & Company has provided strategic advice to corporations and other organizations.
Across the private, public, and social sectors, they work with leading organizations in more than 65 countries. They can address problems that no one else can due to their scale, scope, and knowledge. In addition to functional and industry expertise, they have a broad geographical footprint. As a team, they are passionate about tackling challenges that matter to their clients and often the world at large.
As they work with their colleagues, they work with their clients. At every opportunity and every level, they build their leadership capabilities. To build internal support, reach real issues, and make practical recommendations, they do this. As part of the process, they enable clients to fully participate and lead the ongoing effort.
| Founder | James O. McKinsey |
|---|---|
| Year Founded | 1926 |
| Origin | Chicago |
| No. of Employees | 30,000 |
| Company Type | Public |
| Market Cap | $244.24 Million (2021) |
| Annual Revenue | $10.6 Billion (2021) |
| Net Income/ Profit | N/A |
Services by McKinsey
McKinsey offers the following services to its clients globally –
- Strategy Consultancy
- Management Consultancy
- Digital Consultancy
- HR Consultancy
Competitors of McKinsey
Here are the top 5 competitors of McKinsey
- Boston Consulting Group
- Endava Plc
- Bain And Company
- Ernst And Young
- Accenture
Now that we know important facts about McKinsey, we can look into the SWOT analysis of McKinsey.
SWOT Analysis of McKinsey
A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like BCE (McKinsey Canada Enterprises) to compare its business and performance to that of its competitors.
It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of McKinsey.
To better understand the SWOT analysis of McKinsey, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of McKinsey.
Strengths of McKinsey
McKinsey has numerous strengths that help it to thrive in the marketplace. Some of the strengths of McKinsey are
- Sustainable Development: McKinsey’s strengths and resources are leveraged to build a sustainable competitive advantage among the organizations. They foster growth of their clients while keeping the environmental impact in account.
- Diverse Portfolio of Services: McKinsey Firm’s services portfolio makes it possible to target several industries in the domestic and international market at the same time. As a result, McKinsey has been able to develop a diverse revenue mix and profit mix.
- Renowned Reputation: McKinsey is one of the world’s biggest firms and has had high revenue due to its focus on consultancy, operational services, management, digital, technology and high standards and morals which leads to its high performances.
- Strong Portfolio: Mckinsey is functioning in more than 65 countries and creating a strong management team from the last 90+ years. With this long year of experience, they have been recognized as the most prestigious consulting firm in the world.
- Experts and Professionals: McKinsey has a large number of skilled workers and specialists behind it to get things done, with a customer base ranging from consulting to management services. As a result, McKinsey has established itself as a “specialist” or “expert” in a variety of sectors, employing a large number of industry specialists.
- High Level of Client Satisfaction: McKinsey has a customer-focused approach. It has loyalty programs for its clients. Clients are loyal because of its customer-focused approach. It has a good environment for employees and a shift in culture that is guided by the management.
Weaknesses of McKinsey
Weaknesses are aspects of a business or brand that can be worked upon. Here are some of the weaknesses of McKinsey:
- Lack of Coordination: Due to several sectors working simultaneously there can be a lack of communication and coordination in teams. McKinsey has been trying to serve several mid-size companies as well but faces stiff competition which can further lead to slower growth.
- Dependence on Consultancy: Consultancy is a major source of revenue in McKinsey, despite having different sector works which can be bad for companies long run.
- Investment in R&D: McKinsey has not been able to compete with the leading players in the industry in terms of innovation and R&D. It has come across as a mature firm looking forward to bringing out products based on tested features in the market.
- Innovation: McKinsey has been unable to compete in terms of innovation with the sector’s best businesses despite spending more on research and development than the industry average.
- Rate of Employee Attrition: There is a significant rate of employee attrition when compared to other companies in the business. McKinsey has a greater personnel turnover rate and must spend more on training and development.
Opportunities for McKinsey
Opportunities are potential areas of focus for a company to improve results, increase sales, and, ultimately, profit. Some of the opportunities for McKinsey are
- Easy Acquisitions: Since McKinsey has already established itself at a global level, it’s easier for them to acquire firms with smaller market share.
- Attract and Retain Talent: Everybody looks forward to working at firms where employees have a good working environment, McKinsey can use it to select the best of human resource available.
- Big 3 Management Label: This label can help them grab opportunities and ensure growth in emerging markets across the globe.
- Technological Development: Technological advancement could be used to automate their work, which will save them cost. Also, their huge revenues make it easier to make heavy investments in technology.
- Acquisitions & Mergers: Accenture recently acquired ‘IncepTech,’ a digital firm based in Budapest. McKinsey’s analytical power might be enhanced as a result of such purchases, allowing it to expand.
Threats to McKinsey
Threats are environmental factors that can be harmful to a company’s growth. The following are some of McKinsey’s threats:
- Intense Competition: McKinsey faces cutthroat competition from firms like Endava, Boston Consultancy, Accenture, EY etc and other businesses that provide similar services.
- Currency Fluctuation: Where currency fluctuation happens, international projects appear to be hitting. Which is a serious challenge to the business.
- Knowledge Centers: This can have a counter effect on consulting firms’ business when firms constitute their in-house knowledge centers.
- Government Policies: Government Policies are the major factors that affect the business of a company like McKinsey.
- Controversies: McKinsey has been caught in several controversies which have affected the reputation of the firm such as the Enron scandal in 2002, McKinsey role in the opioid epidemic, fine for insider trading by investment affiliates etc.
This ends our elaborative SWOT analysis of McKinsey. Let us conclude our learning below.
To Conclude
McKinsey is a well-reputed company that is a trusted one among business clients in the world. In the SWOT analysis of McKinsey, we learnt that it has reached the markets of its nation but is still facing the problem of marketing its products internationally due to fewer funds and inefficient financial planning.
With increasing competition in such markets, companies need to do better digital marketing efforts. In today’s world, people need to know more about the marketing aspects used to boost the company’s growth. If you are intrigued with the above piece of information in learning more and upskilling, check out the 3 Months Advanced Digital Marketing Course by IIDE to know more.
We hope this blog on the SWOT Analysis of McKinsey has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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