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The McKinsey Way

Ethan M. Rasiel

Gaurav Rathi (09016)


Priyadarshini N (09035)
02/19/10 1
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Agenda

 The McKinsey way


 Problem solving process
 The Toyota way
 Hypothesis testing
 80/20 rule
 Indian examples

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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

02/19/10  Giving competition to other players in the 24


Summary

 McKinsey & Company


 The McKinsey Way
 The Toyota Way
 Tata Ace
 Britannia Actimind
 80/20 rule
 Hypothesis testing

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