What is McKinsey’s Seven Degrees of Freedom for Growth, and what are best practices, tools and online templates for teams and organizations?
Definition of McKinsey’s Seven Degrees of Freedom for Growth
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool that helps companies realize the strategic opportunities to grow. It was developed by partners at McKinsey and Company and outlined in the book The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise, published in 2000.
Description of McKinsey’s Seven Degrees of Freedom for Growth
The Seven Degrees of Freedom for Growth was created to address managers who restrict growth ideas while trying to expand their business. Each degree helps managers open their minds and break out of existing thinking patterns. The Seven Degrees are:
- Selling existing products to existing customers – The first step is to focus on selling more of the existing products to current customers. Analyzing the marketing strategy to persuade current customers to increase the size and frequency of their purchases is a simple way to encourage company growth. Another option is to look at pricing to learn if there are adjustments to pricing strategy that can add extra value to customers and increase growth.
- Acquiring new customers in existing markets – This degree considers how to attract new customers to increase growth in the existing product lines. One way to do this is to use market segmentation to divide the market into niche groups. This way, the company can develop new marketing approaches with particular appeal to customers in specific segments.
- Creating New Products and Services – This third degree focuses on developing new products and services to enhance company growth, as well as improving on current products to generate more appeal to new and existing customers.
- Developing New Value-Delivery Approaches – This degree relates to the handling of products in transit to customers. A company would look to improve the way in which it creates, offers and delivers their products in order to increase growth. This includes evaluating how outsourcing might speed up production and therefore delivery times, or new distribution channels which would reach new consumer segments.
- Moving Into New Geographies – This degree looks at increasing distribution in current geographic markets in addition to looking for new opportunities in areas which haven’t yet been explored.
- Creating a New Industry Structure – This degree encourages the use of alliances and acquisitions to grow the business. Partnering with and acquiring new businesses can help create better economies of scale and increase bargaining power with suppliers. This can be a powerful way to add to company growth, but also has risks associated with it due to the unpredictable nature of mergers and acquisitions.
- Opening up New Competitive Arenas – The last degree of growth to look at is the investigation of new opportunities via diversification. By using tools such as VRIO Analysis and Core Competence Analysis, it may be possible to learn of skills and resources that already exist within the organization to diversify and expand into new markets and industries.
Tools & Templates
Various types of analysis, such as a PEST Analysis, Brand Pyramid, VRIO Analysis and Core Competence Analysis can be used to provide insights, data and additional support when using the McKinsey’s Seven Degrees of Freedom for Growth.
upBOARD's Online Seven Degrees of Freedom for Growth Tools & Templates
Unlike most traditional strategy techniques, upBOARD’s online Seven Degrees of Freedom for Growth tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.
Learn more about upBOARD’s portfolio of other business strategy best practice tools and templates, including:
2 X 2 Matrix, ADL Matrix, Affinity Diagrams, Baker’s 4 Strategies of Influence, Balanced Scorecard, Benchmarking, Blue Ocean Strategy, Bowman Strategy Clock, Build-Measure-Learn Feedback Loop, Business Model Canvas, CAGE Distance Framework, Competitive Analysis, Competitive Landscape Analysis, Contingency Planning, Core Competence Analysis, Critical Success Factors, Discovery Driven Planning, Economic Value Added, First Mover Advantage, Five Forces Model, Force Field Analysis, Gap Analysis, GE McKinsey 9-Box Matrix, Go To Market Strategy, Hambrick & Frederickson’s Strategy Diamond, Hedgehog Model, Hook Model of Behavioral Design, Hoshin Planning System, Kay’s Distinctive Capabilities Framework, Key Outcome Indicators, Kotler’s Five Product Levels Model, Kotler’s Pricing Strategies, Lafley & Martin’s Five Step Strategy Model, McKinsey 7S Model, McKinsey’s Seven Degrees of Freedom for Growth, Mergers & Acquisitions, Mission Statements, Mullin’s Seven Domains Model, OGSM Framework, Ohmae’s 3-C’s Model, Partner Relationship Management, PEST Analysis, PESTLE Analysis, Porter’s Diamond, Portfolio Management, Purpose Statements, Pyramid of Purpose, Scenario Planning, Simonson & Rosen’s Influence Mix, SMART Performance Metrics, SMARTER Goals, SOAR, Strategic Goals, Strategy Map, Strategy Roadmap, Strategy Uncertainty Map, SWOT Analysis, TOWS Matrix, Triple Bottom Line, USP Analysis, Value Chain Analysis, Value Disciplines Model, Value Net Model, Values Statement, Vision Statements, VRIO Analysis, and Weisbord’s Six-Box Model.