McKinsey's Strategic Control Map Framework Model Template

Description
In 1996 Vijay D'Silva, Bob Fallon and Asheet Mehta, from Consulting Firm McKinsey & Company developed the "Strategic Control Map". Using market capitalization dynamics, the framework helps organisations map M&A (Mergers & Acquisitions) opportunities and threats. This enables them to proactively hunt down other companies to acquire, and to defend themselves against hostile acquisitions. 🏛

The framework has two dimensions:

- Company Size: Book Value (X axis)
- Performance for Shareholders: Market-to-book ratio (Y axis)

The combination of both axis leads to four main categories, encompassing specific challenges and strategic initiatives.

✅ COMPLETE CONTROL (Big Size + High Performance). They are the least likely to be considered as acquisition targets. Their priority is to maintain their competitive advantage by going for new valuable opportunities, while keeping a focus for high returns.

✅ PARTIAL CONTROL THROUGH SIZE (Big Size + Low Performance). These are the companies that are the most exposed to hostile acquisitions. To creep out of this position, they must focus on improving their current business performance, reinvest in others or kill toxic business units (e.g. Small + low/negative returns).

✅ PARTIAL CONTROL THROUGH PERFORMANCE (Small Size + High Performance). These companies are characterised by a high level of proprietary knowledge or competences that generate over-average financial returns, especially from intangible assets. As long as they keep that competitive edge sharp, they are in a relatively comfortable position. Their focus is to "grow the pie" progressively, without sacrificing high returns.

✅ VULNERABLE (Small Size + Small Performance). These are the big "at risk" mammouths in the playground. Their main issue is under-average performance. If not improved, they become easy M&A targets for better performing market leaders looking for cost-consolidation opportunities.

See original post by Enduring Ideas here.
And clear explanation here by MBA Knowledge.

The gist of the framework is to have a global peak at a given market/industry, from a market capitalization perspective, and to spot those in a position to be acquirers and those to be acquired.

The Strategic Control Map can also be used to map a given industry actor's trajectory over time enabling to see what are the most efficient combinations of performance + size to remain competitive and independent.

Given the success, clarity and originality of the McKinsey Strategic Control Map Framework, I decided to create 4 versions, which can be used by management consultants, M&A Teams, bankers or leadership teams:

1/Industry -> To map a given industry
2/Company X -> To position a given company in an industry
3/Evolution -> To visualize the evolution of a given actor over time in an industry
4/M&A (Mergers & Acquisitions) -> To highlight potential companies to acquire, given their position on the map

The file are 4 editable Microsoft PowerPoint Template Slide + Associated Excel Models, with an online or offline 18 step-by-step methodology, with pedagogical illustrations for each step.

Should you have any questions on using this top tier Management/Strategy Framework Template slide, you're welcome to reach out to me via Private Message.

Good luck!
- Tim

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