CIC McKinsey - Case Studies and Learnings
CIC McKinsey - Case Studies and Learnings
CIC McKinsey - Case Studies and Learnings
January 2015
Contents
Key learnings
Consideration on tender process
30
Client situation/objectives
Established development plan in close cooperation with ▪ New Hyderabad will be developed over the next 5
government and internationally renowned town planners years into a model city to be an engine for future
around seven core aspects: economic growth in the state
▪ Business district ▪ New Hyderabad will be a benchmark for other Indian
▪ Residential housing cities and will place Hyderabad on the world map
▪ Government
▪ Health care
▪ Education
▪ Retail/Entertainment
▪ Public Spaces
• McKinsey diagnosed the intrinsic assets and ▪ After the implementation of the new strategy, various
systemically prioritized the new industry portfolio, economic indicators of the zone have been growing by
pointed out initiatives to tackle the internal barriers and about 40%.
develop implementation plan ▪ The zone has made several key tenants, including
• In addition, the team identified infrastructure needs, Infineon, which set up its largest R&D center in Asia-
brought forward suggestions on organization structure pacific inside the Xi’an High-tech Park
and detailed the implementation plan
▪ McKinsey conducted overall diagnostic and helped the ▪ Overall development plan gained high recognition and
zone quickly prioritize the new industry portfolio, frame approval from Wuhan Municipality leaders; Wuhan
the value propositions, and develop an implementation High-tech Zone is aggressively implementing the new
plan. The team also helped the client adjust the strategy and continuously seeks McKinsey’s feedback
organization structure, set up investment attraction on new action plans
KPI systems and train the client BD team on new skills
Client situation/objectives
▪ Performed market assessment and found that “if you ▪ Organization up and running – staffed with
build it they will come” model will not work approximately 300 professionals
▪ Defined strategy for development around key industries ▪ Masterplan substantially changed from high-end to
▪ Developed model of demographics of future population affordable housing
based on industrial and commercial footprint ▪ Basic infrastructure in place
▪ Defined masterplan and housing products based on
▪ First 1000 units finished
future population and its demographics
▪ Developed organizational setup of developer and
designed its core processes
▪ Defined service strategy (eg on healthcare and
education) to provide services for future population
▪ McKinsey helped develop new value propositions for ▪ As a result of the project, Huangpu’s newly set up
Huangpu, based on diagnosis of client’s main Modern Service Development Office has started to
strengths and weaknesses, prioritization of modern implement specific sales and marketing processes and
service industries and sub-sectors, and key learnings incentive programs to attract targeted companies.
from relevant international cases ▪ Huangpu successfully attracted leading MNCs e.g., HP,
▪ McKinsey also played a big role in implementation, Nokia, TPG, Ebay
helping the client to launch a series of customized
programs to attract leading modern service
companies, and designing the client’s organization
structure to make it more customer-oriented
• McKinsey helped frame the development model, ▪ Through McKinsey’s work, city officials have agreed to
phased development construction procedures and the development plan and the client is moving ahead
targets, and detailed out a functional layout plan aggressively with detailed urban planning and
• McKinsey also helped to determine value proposition developer attraction efforts
for different potential investors, prioritized these
investors, and made initial contact with them
• In addition, McKinsey developed an operational model
for the management company, identified required
resources and government support, and developed
financial forecasts
• The McKinsey team created a bottoms-up model to ▪ GIFT is currently being implemented based on our
estimate demand for talent and real estate space suggestions
across all financial services slivers, defined a
comprehensive infrastructure plan, designed a ▪ Housing and office space for over 50,000 people is or
differentiated approach to real estate pricing based on will be under construction
extensive benchmarking and likely pricing evolution,
identified enabling tax polices and regulations to
attract major clients, defined an integrated approach to
short-term and long-term talent management, crafted
a focused business development plan and designed a
strong project organization to drive execution
UK Prime Minister’s 2011 ▪ Supported the Prime Minister’s office in developing a strategy to make East London into a hi-tech hub
Office ▪ Strategy adopted, and is currently being rolled out (e.g., setting up Entrepreneur First)
2010- ▪ Supported Skolkovo on multiple occasions on launching and developing innovation clusters in biomedicine
2012 and IT
Moscow (Skolkovo)
▪ Funding for initiatives has already been approved by Skolkovo and the Russian government, and many are
being rolled out
Lower Saxony
2010 ▪ Development of regional growth including assessment of strengths and weaknesses; identification of sectors
with high potential for growth
2003- ▪ Supported the Crown Prince of Bahrain on developing and implementing an economic development policy for
Bahrain (Crown) 2010 the country
2010 ▪ Supporting Shanghai city to unlock economic value through growth of healthcare services
Shanghai (mayor)
▪ Planned medical center located, serving a district with 1 million inhabitants in Shanghai
South East Asian 2009- ▪ Supporting a set of HC and government clients in Malaysia, to redefine high quality Medical care, Research,
country 2010 and Teaching through partnership with a world-leading AMC
Singapore 2008 ▪ Developed strategy for Singapore Medicine, a government-industry partnership tasked with turning country
(government) into a medical-hub
2004- ▪ Establishing a broad economic development strategy, including developing innovation clusters
North African
country
2008 ▪ Strategy fully endorsed by the government; project resulted in creation of thousands of new jobs, and launch
of a new cluster
2007 ▪ Identify sectors for investment and social/economic development
Russia (central gov’t)
1999 ▪ Establish an economic development strategy to create 80,000 new jobs by 2015, with focus on IT and
Dortmund (mayor) logistics
n/a ▪ Built robust business case to support public and private sector healthcare growth partnership and reform in
Ohio (Governor) the state of Ohio
Key learnings
Consideration on tender process
1 Job is the primary driver for most of the 6 Uniqueness in the value
successful developments proposition and public spaces
ensuring individual
characteristics to make the
place stand out and offer
improved/different liveability
2 Proximity to the main city and convenient from the rest of the city
commute a major driver to making a city pre-
ferred by all classes of society 7 Creation of iconic
symbols/institutions adds to
the growth and attractiveness
3 Basic social infrastructure like school, grocery of the area
store, required for even normal growth. Lack of this
results in slower growth & resident dis-satisfaction 8 Thriving food and beverage
magnet is a great crowd
puller
4 Cater to some degree of live, work, shop,
play, learn to ensure that needs of the target 9 Lack of integrated master
customers are met planning results in sporadic
development, delayed social
infrastructure and less of ho-
5 Commercial-social infrastructure (like malls, listic community development
multiplex) over & above the “must-haves” like
school & hospital accelerates absorption and
creates vibrancy 10 Mobilisation of government
very significant in context of
successful Indian
developments
SOURCE: Interviews with experts and residents; Team analysis McKinsey & Company | 13
Successful developments have addressed most of High Medium Low
the critical factors
Vibrant Distinct
Anchor Proximity/ 5 pronge social value Integrated Gov.
jobs connectivity dev dev. prop Iconic dev. planning F&B support
1 Digital Media
city
2 Birmingham
3 Downtown
Successful
developments
4 Hitec City
5 Magarpatta
6 Newport
7 La Defense
8 Hinjewadi
Unsuccessful
9 Aamby valley
developments
10 Lavasa
11 Ibiza
SOURCE: Interviews with experts and residents; Team analysis McKinsey & Company | 14
High
8 Case example: Hinjewadi Medium
Overall Low
▪ Brief: Developed as Success ▪ Developed as the IT hub of Pune, attracting young working
the IT hub of Pune & population to stay in the city
spearheaded by MIDC – One of the biggest employment hubs in the city and most
▪ Location: 18 km from people stay to be close to place of work
Pune city centre ▪ Situated close to the mainland of Pune (<20 km) proved a big
▪ Period: 15+ years; advantage in the early stages
Started in early 2000s ▪ Support by government in terms of getting companies to set
▪ Area: 500+ acres up offices and provide physical infrastructure
▪ Workforce: 4 lakh+
working in Hinjewadi
Short- ▪ No social magnets in the city developed, resulting in city being
▪ Population: N/A comings “dead” post office hours e.g.,o retail mall in the area
▪ Real estate: INR 5-6K ▪ No elements of “play or shop” in the area and no uniqueness
per sqft (50% of in the quality of life
Koregaon area)
▪ Though situated close to the city, inadequate public transport
and roads a major cause of dissatisfaction among residents
▪ Lack of integrated outlook of city planning as result of which,
no social development in 15 years
SOURCE: Interviews with experts and residents; Press searches McKinsey & Company | 15
8 Pune’s IT hub, Hinjewadi, only focused on jobs but not on a vibrant
community
▪ Brief: La Défense is Success ▪ Significant captive population created with over 150K jobs in
the modern high-rise the district
and office-tower ▪ Caters to multiple target segment including residential, office,
district of Paris shopping mall, tourist attractions
▪ Location: suburbs of ▪ Strong individual character, with tall structures, differentiating
Paris it from the rest of Paris:
▪ Period: - ▪ Unique art installations forming an open-air museum a central
attribute of La Defense and a big tourist attraction
▪ Area: over 400 acre
▪ Creates vibrancy through cultural activities like concerts,
▪ Workforce: 150,000 festivals, and shopping events
employees
▪ La Défense is well connected to old Paris through all modes of
▪ Population: 25000 transport
▪ Real estate: 600-700
euros per sqft( 800- Short- ▪ Residential spaces not planned in the initial master plan and
1200 euros in main comings hence quite isolated
city of Paris) ▪ No permanent social anchors or social developments like
clubs, malls, etc. in the place
▪ Houses La Grande
Arche, one of Paris' ▪ Deserted in evenings and weekends
important landmarks ▪ No places of primary education in the place
SOURCE: Interviews with experts and residents; Press searches McKinsey & Company | 19
7 La Défense has successfully created a large thriving PRELIMINARY
B Isolated residential area ▪ “The residential areas are too isolated in their own
from main business district zones contrary to Lower Manhattan which has
residential right at its edges ”
▪ “Never designed to be residential”
C Image of the residential not ▪ “20000 low to mid income people live here” – New
in line with the high end York times
business situated out here
▪ “Sure it is nice area to come as a tourist, or even
to work, but it is terrible to live in La Defense”
Key learnings
Consideration on tender process