MBB Consulting Frameworks : Analysis of McKinsey, Bain and BCG consulting tools

In the past few posts we have covered consulting slide decks, interview preparation and top-down approach vs bottom up approach in consulting.

This is especially useful for candidates who are applying to McKinsey, Bain, BCG and other consulting firms.

Today, we talk about some of the tools that were made famous by consulting firms.

I would not say that these consulting firms typically invented these tools but they made their usage popular among management circles.

Business schools often teach some of these tools to their students and when applied well, these tools can provide you a good framework to organise your thoughts.

McKinsey Strategy Consulting Tools

McKinsey proposed the well-known Three-level horizon model and the 7S model in management consulting practice.

McKinsey’s 3 Horizon Model is premised upon addressing growth and innovation by assessing potential opportunities for growth in future without neglecting the performance of the present.

The model divides the timeframe into three horizons ranging from the core business (short-term) to the future business opportunity (long-term), with an intermediate horizon that acts as a transition phase for the implementation of the innovation.

Horizon 1 refers to the core activities, assets and business of an organization. This horizon is responsible for activities that provide the current best profits.

Horizon 2 refers to the emerging businesses, entrepreneurial ventures and opportunities that could result into future profits via investments.

Horizon 3 refers to the creation of new businesses and opportunities that do not currently exist but can be achieved, with the activities of horizon 2, to create uncontested market spaces, or Blue ocean.

The 7-S model was developed in the early 1980’s with the help of Julien Philips and Anthony G. Athos by consultants named Tom Peters, Robert Waterman, who worked for the consulting firm McKinsey and the Company.

The model is widely used by academics and practitioners and remains one of the most popular strategic planning tools.

The 7-S model points out that the company must consider all aspects of the situation in the development process, including structure, system, style, staff, skills, strategy, and shared values.

In other words, it is not enough for companies to have clear strategies and well-thought-out action plans.

In the model, strategy, structure and system are regarded as the “hardware” of business success, and style, staff, skills and shared values are regarded as the “software” of business success.

A good way to know about McKinsey’s style of thinking and consulting is to read the famous books, The Mckinsey Way and The McKinsey Mind. These books give you an interesting insight and perspective into the working of McKinsey consultants.

2. Boston Consulting Group Consulting Tools

BCG’s business philosophy has influenced countless companies in the world.

Today’s popular competitive tactics in the business world, such as price wars, advertising wars, IPO valuation, dumping and anti-dumping, all seem to find their roots from Boston Consulting Group.

BCG has proposed a series of analysis tools and management concepts: Experience curve, Time-Based competition, Segment-of-one marketing, investment or product portfolio strategy (growth/ownership) rate matrix), Portfolio strategy the growth/ share matrix, Value-based management, Sustainable growth formula, Total shareholder value, Strategic segmentation, and expansion of prospective customers discovery, Value chain analysis. (We cover the real world application of these concepts in detail in our consulting course)

3. Bain Consulting Tools

Bain & Company released the book “Profit from the Core” after 10 years of research on strategic decision-making.

The results in the book show that 90% of the world’s companies have failed to achieve sustained profit growth in the past 10 years.

After analyzing the battle path of profitable companies, Bain & Company found that
for a company to successfully formulate and implement a growth strategy, there are two
crucial factors:

  1. Consistently find new ways to exploit the full profit potential of their existing core business.
  2. Expand systematically into business adjacencies – logical adjoining business areas which actually strengthen the core.
  3. Periodically and preemptively redefine their core business whenever industry turbulence demands it.

In the research process of this theory, Bain & Company summarized a series of business consulting theories, such as market division, competitor evaluation, profit analysis of adjacent industries, customer analysis, customer group segmentation, productivity improvement, competitiveness benchmarking, customer Loyalty, price analysis, related business division, market entry analysis, net promoter score (NPS) etc.

These are some of the well-known concepts that consulting firms pioneered over the last few decades.

In my consulting course, I cover the application of these amazing consulting tools to real world problem solving. Mastering these techniques gives you a headstart and puts your miles ahead of other candidates.

Join the course today!

Default image
Abhijeet Singh
Abhijeet is the Founder & CEO at STEPVUE. He is a heady mix of ambition, sarcasm, sports and something more. Ex: GAIL India Limited (Brand Marketing), RSM MBA and DTU
Articles: 24