The McKinsey Quarterly

Articles from Summer

A Computer Legend in the Making
Tycoon Liu Chuanzhi, the chairman of Legend Holdings, explains how his company became China's--and Asia's--leading manufacturer of PCs. When people in most parts of the world want to buy a personal computer, they usually think first of the well-known...
Asia's Performance Challenge
One of the consequences of globalization for Asian companies is that they are now expected to match the performance standards of their counterparts in developed countries. In a recent survey of 27 leading Asian companies, we encountered the rigorous...
Beyond the Unbundled Corporation
Is the new "networked organization" already a thing of the past? We don't think so. According to recent McKinsey findings reported in this issues cover article, "The future of the networked company," collaborative networks of suppliers, distributors,...
Caveat Vendor
Telecom-equipment suppliers extended billions in vendor financing to aggressive start-ups and wireless companies. Many of them are now struggling or bankrupt--and their suppliers are suffering, too. The telecom sector's recent problems have been...
First-Class Returns from Tramsportathoo
Vertically integrated transportation companies are sailing into the wind. The answer may be 'sliverization.' For years, the global transportation sector has been synonymous with low returns. Even during the past decade of strong economic growth,...
How Fast Is Too Fast?
Speed in building a business is sometimes advisable, even necessary. But more often than not, it kills. Just a few years ago, the notion of how to create a new-economy business was turned on its head. Suddenly, you were supposed to enter a market...
Making Solutions the Answer
Many companies hard-pressed to maintain their margins through products alone are turning to 'solutions.' But to succeed, they must not only embrace competitors but also often turn away existing customers. In all sorts of industries, companies that...
Managing the Knowledge Manager
First agree on what you want to achieve. Then develop and execute an agenda. Most top managers recognize the value of managing knowledge. In a 1998 survey of North American senior executives, 77 percent rated "improving the development, sharing,...
Mutually Assured Survival
Mutual insurers must use their capital more productively, but there are many ways to do so. Although a substantial proportion of the property and casualty insurers of the United States are owned by their policyholders, the current industry trend...
Paying a Green Premium
Green energy would seem to have a rosy future. Technological advances have helped to lower the cost of renewable power sources such as wind turbine generators, solar cells, small hydroelectric plants, and geothermal energy. Some European governments...
PCs vs, TVs
Companies are rightly investing now to deliver consumer broadband applications as the technology's penetration grows. But current expectations about the industry's development aren't a good enough guide to the future. Residential broadband access...
Putting a Price on Solutions
Remember: the whole is worth more than the sum of its parts. Setting the right price for a solution is really crucial: too high, and customers will meet their own needs; too low, and suppliers won't get paid for the value they are delivering and...
Remaking Market Making
The business is becoming commoditized. Can it be saved? There are some who believe that the rise of new, low-cost electronic securities trading should have killed market making and brokerage -- the obscure tasks of executing securities trades for...
Simplifying Web Segmentation
(B2C) companies may have the tools they need to gain knowledge about every aspect of their customers' lives and thus to build personalized, profitable relationships with consumers. Unfortunately, acquiring the kind of information these tools need is...
The Deregulation That Wasn't
California's energy crisis has been stoked by the excessive revision of rules--in a supposedly deregulated market. A recent survey [1] of public-utility commissioners in the United States showed that nearly 75 percent intended to halt their deregulation...
The Dynamics of European Broadband
Our latest projections [1] of broadband uptake in France, Germany, Italy, the Netherlands, Sweden, and the United Kingdom indicate that, by 2005, some 28 million (or 25 percent of homes) will have a broadband connection--defined as a connection that...
The False Promise of Mass Customization
Build to order will be hugely expensive and challenging, and its benefits are uncertain. But there is a cheaper alternative. For more than two decades, mass customization has been the future of manufacturinguand for some manufacturers it probably...
The Future of the Networked Company
Even during the present slowdown, networked companies are outperforming conventional ones. They are likely to go on doing so. When Cisco Systems announced a $2.2 billion inventory write-down in the second quarter of 2001, skeptics immediately proclaimed...
The M&A Trap for Utilities
In a bid to secure growth, utility companies have been frantically buying generation capacity, distribution networks, and customer franchises in Europe's deregulating markets, often paying extraordinary amounts of money in the process. Strategic value...
The Race to the Bottom
When industries deregulate, their managers face unfamiliar challenges. Price wars are often the unfortunate--and unnecessary--result. The wrong pricing strategy can destroy corporate value faster than almost any other business mistake. And when...
Volatile Gas
Europe's natural-gas producers are set to do well in the postderegulation era, but wholesalers, transmission companies, and retailers will see their margins squeezed as regulation and fierce competition bring lower end-user prices, This conclusion...