Geopolitics

Proactively navigating the implications of geopolitical uncertainty

Geopolitical conditions have always influenced companies’ fortunes, but since the end of the Cold War, they’ve taken a back seat to macroeconomic, strategic, and operational concerns. No longer.

Business leaders today view geopolitical tensions as the biggest risk to economic growth, according to the latest McKinsey Global Survey on economic conditions. The resilience and strategies of multinational corporations have been tested by intensifying regional conflicts and international trade divergences in recent years. CEOs and boards understand that a shift in the global order is under way. But many have yet to grapple with an important implication: geopolitical shifts present not only risks to mitigate but also opportunities to seize. Indeed, institutions that position themselves to flourish in today’s geopolitical climate will enhance the lives and livelihoods of their employees and populations.

We believe the often-nebulous concept of geopolitics can be abstracted to a set of concrete drivers that influence everyday business decisions. McKinsey’s Geopolitics Practice looks at these drivers from a value-creation perspective, helping leaders minimize the downside effects of geopolitical shifts and mobilize opportunities for institutional and societal benefit.

Our approach

We help institutions translate the implications of geopolitical scenarios to business decision making and value creation. Amidst ongoing geopolitical shifts, there remains a path to invest in bold bets that maximize risk-adjusted returns or improve public sector mission objectives. Our innovative approach aligns to three pillars:

Prepare

Align board and management on geopolitical scenarios and develop strategies to enhance organizational geopolitical capabilities

Propel

Realign geo-business portfolios and assets to accelerate growth and maximize value, and build presence in resilient and growing trade corridors

Protect

Implement effective geopolitical crisis management practices and proactively provide guidance on resilience planning and global trade compliance

How we can help

Growth Acceleration

We improve risk-adjusted returns through revenue, earnings growth, and business-mix optimization across geographies and product lines

Core Business Operations Optimization

We ensure cost competitiveness / differentiation and resilience across capital-intense operations, global people operations, and technological footprints as geopolitical scenarios unfold

Corporate Strategy and Capabilities

We shape corporate strategy, support resilience planning and preparedness, and drive capability building to enhance readiness

Tools To Support Clients On Geopolitics

Economics Analytics Platform (EAP)

McKinsey’s self-serve tool for clients offers pre-built dashboards with access to 20+ McKinsey databases and 1000+ external databases to answer client questions and insights around macroeconomics, trends in cross-border trade, and industry-level analysis. EAP can be used for running initial economic diagnostics and serves as a gateway to our expert-based geopolitics capabilities.

Energy Solutions: Market Intelligence

McKinsey’s Energy Solutions model covers the entire energy value chain to answer “what if” scenarios. It delivers meaningful insights to help energy players around the world identify opportunities, mitigate risk, and validate their business strategy while navigating geopolitical shifts.

McKinsey Geopolitics Value Intelligence Platform

McKinsey’s platform covers global sub-industry-level profit pools, helping clients understand potential earnings impacts across geopolitical scenarios. It enables clients to strategically navigate complex global environments and make informed decisions to optimize profitability amid geopolitical shifts.

McKinsey Global Trade Explorer

The McKinsey Global Institute’s tool delivers thousands of economic indicators to provide the full picture of the evolution of global trade flows and the interdependencies and networks created by them. It offers deep insights into global trade dynamics, which interact with shifts in the global geopolitical framework.

McKinsey Value Intelligence Platform (MVIP)

McKinsey’s platform uncovers quick and curated insights on company, industry, and macro performance for data-driven decision making. It empowers clients to better navigate the global landscape.

Portfolio Navigator Tool: Benchmarks

McKinsey’s benchmarks, leveraging millions of account analysis data, cover core treasury management, commercial card, commercial lending, and deposit services lines of business. The Portfolio Navigator Tool helps clients uncover granular revenue opportunities in light of global geopolitical dynamics to assist with product strategy and compare bank performance against peers.

QuantumBlack

QuantumBlack, AI by McKinsey unlocks the power of artificial intelligence to help organizations blend AI and cutting-edge solutions with strategic thinking and domain expertise to help our clients innovate and develop new opportunities. QuantumBlack insights cover both secular global trends and geopolitical shifts, enabling clients to remain competitive in a rapidly changing world.

Risk Dynamics

McKinsey’s tool, as part of the Risk & Resilience Practice, helps companies across all industries develop cutting-edge risk analytics and manage model risk. It creates value for clients by improving performance across the model lifecycle – factoring in geopolitical shifts.

Strategy & Corporate Finance Insights

S&CF Insights provides clients with comprehensive analysis and insights to develop winning strategies. The global team of over 100 experts uses proprietary databases, analytical platforms, and advanced modeling techniques to generate distinctive data-driven insights. These can help organizations navigate geopolitical shifts, capture opportunities, manage risk, and make faster and better strategic decisions.

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