That came to light last year as part of ongoing research that began more than five years ago and was the foundation for the granularity of growth. Nine years ago, mckinseys granularity of growth analysis introduced. Detailed information on the use of cookies on this site, and how you can decline them, is provided in our cookie policy learn more about cookies, opens in new tab. This article is excerpted from the mckinsey global institute report global growth. Mckinseys granularity of growth data originates from an extensive analysis of more than 750 leading companies worldwide. Growth margin low high growth where to compete 2017 exhibit 2 of 5 exhibit 2 growth and margins vary across industry segments and states individualexchange medicare advantage2 medicaid smallgroup largegroup risk administrativeservicesonly growth variability by state 201520e in percentages 30 90 11 16 27 margin1 variability by state. A finegrained view of the sources of growth mckinsey. Its also training brand and support teams so that they have the skills needed to support the new strategy. The granularity of growth shows, with typical mckinsey rigor, that where you compete is even more important than how.
Reducing debt in mature economies continues to be a long and slow process. Organizational health in healthcare how to drive and sustain high levels of performance over time. The granularity of growth, how to identify the sources of growth. Yuval atsmon is a principal in mckinseys shanghai office. The two bestknown portfolio planning methods are the boston consulting group portfolio matrix and the mckinsey general electric matrix. One common growth strategies is the mckinsey growth pyramid, which has similarities the wellestablished ansoff growth model, but deviates by looking at strategies of business growth using four distinct pillars. Even with backup to disk, data compression and data deduplication, backup windows face constant pressure from data growth rates that often exceed a 50% compound annual growth rate. Return on leadershp i competencies that generate growth. Buy a discounted hardcover of the granularity of growth online from australias leading online bookstore. Managing the strategy journey regular strategic dialogue involving a broad group of senior executives can help companies adapt to the unexpected. The longterm tailwinds of population growth, a growing middle class, and ongoing urbanization will continue to drive demand for even more.
Almost half of the 100 largest companies on the stock exchange that. But in highly differentiated market niches, growth also tends to be coarse and lumpy, defined formally by mckinsey company as granular viguerie et al. I learned an enormous amount in that time, but scarcely enough for me to explain to the world the skills that mckinseyites use to succeed. Growth spurt in a recently released research report from mckinsey global institute mgi, titled global growth. The majority of the market growth has come from existing vaccines rather than new launches. Over the past 20 years, the world economy has grown by roughly 7 percent a year.
General electricmckinsey matrix, fashion marketing, luxury brands, business strengths, industry attractiveness, productportfolio analysis, competitive marketing 1. A typology of growth outcomes structural transformation slow rapid investment in fundamentals low 1 no growth 2 episodic growth high 3 slow growth. The problem is that as mckinsey descends from the macroeconomic heavens to the temporal realm of japanese corporations, and, moreover. Introduction it is well known that the traditional transactional marketing has been replaced by the relational marketing cf. These include operational skills, privileged assets, growth skills and special relationships gupta, gupta and krishnaswami, 20. One of their most surprising conclusions is that increased marketshare is seldom a driver of growth. The granularity of growth wiley online books wiley online library.
Confidential the granularity of growth need for dynamics in strategy helsinki university finland june 5th, 2008 this report is solely for the use of client personnel. How to identify the sources of growth and drive enduring company performance. Parsing the growth advantage of emergingmarket companies. With mckinseys proprietary growth decomposition methodology, each companys growth was then disaggregated into three categories. About the authors richard dobbs, james manyika, and jonathan woetzel are directors of the mckinsey global institute, where jaana remes is a partner. How marketers are using data to rethink and improve the customer journey 5 combines marketing, data, and technology skill sets see page 6. Mckinsey large company growth decomposition database 21 33 46 market growth inorganic activity organic share gainloss. Organizational health in healthcare how to drive and sustain.
The mckinsey general electric matrix is discussed in this study note. Mckinsey global institute from to demographic dividend driving growth high growth but low volume in emerging economies aging and the productivity imperative high absolute growth in emerging economy cities factor inputs policy 1 demand 2 4 technology 3 stability 5 decreasing global cost increasing scarcity of talent. In retail, for example, its believed that purchasing power and format determine the bottom line. This strategic portfolio analysis tool has been initially developed by ge and mckinsey. Mckinsey pdf the mckinsey global institute mgi, established in 1990, is mckinsey. The authors of the granularity of growth explain why the best strategies begin with a precise understanding of market and product opportunities. The evidence shows, however, that unless it consolidates to just three or four companies and can keep out new entrants, pricing behavior doesnt change. The granularity of growth, with new analyses and descriptions of several companies experiences adopting more granular approaches to growth. In addition, he has led the writing of the granularity of growth. A new approach to changni g your growth trajectory ni a digita wl ordl growth budli s value. Mckinsey, a university of chicago professor, opened a consulting office in. Highproductivity tradable segments of services cannot absorb as much labor since they are typically skillintensive fire, business services low productivity nontradable services cannot act as growth poles since they cannot expand without turning their terms of trade against themselves continued expansion in one segment relies on expansion on others. Asia, a companion volume that explores the particular opportunities and challenges of growth in this most dynamic and fastchanging region.
If, like many executives, you take an average view of markets, the answers. To find out, we tested the extent to which industry growth rates correlate with the growth rates of companies at five levels of market granularity, which we call g0 to g4. The granularity of growth our research on the revenue growth of large companies suggests that executives should deaverage their view of markets and develop a granular perspective on trends, future growth rates, and market structures. Mckinseys growth strategy aka fourth arrow for japan i. While growth is a top priority for companies of all sizes. Organizational health in healthcare how to drive and. Theres no point in repeatedly backing up unchanged data. Assessing the impact of reforms on productivity growth is a challenging endeavor as the. We apply the concept of granularity to the banking sector. Chris bradley, lowell bryan, and sven smit 1 lowell bryan, dynamic management. The granularity of medicaid mco growth 3 reached a cagr of 19%, and the companies increased total market share. How to identify the sources of growth and drive enduring company.
How to identify the sources of growth and drive enduring. Apr 06, 2015 the problem is that as mckinsey descends from the macroeconomic heavens to the temporal realm of japanese corporations, and, moreover, claims to discover within this realm the ills that plague. For example, it is generally believed that asset growth will increase during an economic recovery, and decrease during a recession. Portfolio momentum the organic revenue growth that a company achieves through the. The report is part of a broader ongoing mgi research effort on the topic of growth and renewal.
The granularity of growth 43 growth, as this article will explain. The authors of the granularity of growth explain why the best strategies begin with a precise understanding of market and product. Unlike previous books based solely on anecdotal evidence, the granularity of growth derives from the authors threeyear, indepth, analysis of four hundred of the worlds largest companies. While growth is a top priority for companies of all sizes, it can be extremely difficult to create and maintainespecially in todays competitive business environment. Mckinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. The granularity of medicaid mco growth mckinsey on healthcare. These include operational skills, privileged assets, growth skills and special relationships. The authors objective is to help leaders make strategic decisions on a granular level without increasing complexity providing a stepbystep. This model is similar in some respects to the wellestablished ansoff model. A granular analysis of competitiveness in each sector, rather than simply. The growth initiative is one of five global taskforces mckinsey has launched in the past year to undertake applied crossfunctional research and development.
However, it is possible that asset growth may not be sensitive to the nationallevel macroeconomic environment for bhcs that focus on regional markets with product. In the latest research, we have studied competitiveness and growth in six industries retail, software and it services, tourism, semiconductors. But lessons of history show that with the right reforms during deleveraging, countries can return to robust longterm growth. Part of the explanation for the difference in performance is that scale increases an orga. Defining the new growth model and strategy for greece retail. The granularity of growth will put you in a better position to succeed as it reveals why growth is so important, what enables certain companies to grow so spectacularly, and how to ensure that growth comes from multiple sources as you take both a broad and a granular view of your markets. The mckinsey general electric growth share business. A great corporate strategy book with very practical applications. However, it looks at growth strategy from a slightly different perspective.
The granularity of growth will put you in a better position to succeed as it reveals why growth is so important, what enables certain companies to grow so spectacularly, and how to ensure that growth comes from multiple. However, over the last few years, a deceleration in growth due to a higher. I based this book on my own experience as a mckinsey associ ate from 1989 to 1992. Heres one companys story, and some principles for everyone. In contrast, aggregate growth for the smaller mcos that yearthose not in the top 15was just 6% cagr.
It will also argue that a finegrained knowledge of the drivers of the companys past and present growth, and of how these drivers perform relative to competitors, is a useful basis for developing growth strategies. In the latest research, we have studied competitiveness and growth in six industries retail. As mckinsey s growth service line leader in asia, he has also ensured a more global orientation to our work. Ge mckinsey matrix last updated wednesday, 02 may 2012 10.
For mckinseys granularity of growth research has shown that the underlying growth or growth momentum of the markets where a companys business portfolio is positioned explains twothirds of that companys revenue growth. Strategic analysis through the general electricmckinsey. Relative impact on company growth percent 416 fully decomposed companies relative contribution obtained by summing all revenue additionssubtractions caused by each of the levers source. Archiving can remove tens of terabytes or more of data from the backup set. The authors are all current or former consultants of mckinsey companys. Many multinational players, however, dont seem to be capturing that growth as well as their emergingmarket counterparts are. The business portfolio is the collection of businesses and products that make up the. Structural reforms and productivity growth in emerging.
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