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McKinsey’s 7S model is a tool that looks at the organizational structure to analyse whether the internal factors like the Systems and staff are synergized to ensure that the organizational goals are being met. It looks at 7 factors like Structure, strategy, skills, staff, style, systems and shared value can be aligned to the organizational goals so that we can ensure that they are interconnected in a seamless manner and can function effectively. In this assignment, we would look at how effectively Starbucks has made use of the 7s model in ensuring that the organizational goals are effectively met.
It essentially means the core principles that the organization stands for even in the wake of the changes in the business environment. It would include the mission statement of the organization and the values that the company would uphold while it is looking to achieve the goals of the organization. We can see that Starbucks has effectively made a positioning for them by channelizing their communications in a unified way by projecting themselves as a lifestyle entity rather than just a plain coffee shop. This has made sure that the customers are also willing to pay that extra premium that they charge because the customers are not just looking at having a cup of coffee but an experience when they are at Starbucks. Also the employees are given instruction to ensure that they maintain the standards in all the countries that they operate to provide the Starbucks experience and make it different from that of other competitors(Daft et al, 2009).
Strategy is the path that the company takes in achieving the goal by mapping the specific actions against each department and ensures that they break down the larger goal into smaller objectives. According to Porter, the competition for an organization does not come essentially from its competition but also from its business environment a d the underlying economics. Beach and every company should therefore look at having competitive advantage that should be able to ensure that they stay ahead of the competition (Price &Chahal, 2009). Starbucks looks at becoming one of the biggest and most admirable brands of the world by making sure that they make their presence in different parts of the world and at the same time they wish to create a brand positioning for themselves that is different from most of the coffee chains by delivering the Starbucks experience to their customers (Peters& Waterman, 2012). Starbucks is on its way to be one among the top brands as they have been ranked 88th in the Inter brands survey among the global brands (Barney, 2012). They plan to become one of the largest retail brands by increasing their market share in the existing markets and at the same time looking at potential markets that can get them the additional income. The Top business management is on a lookout to identify the new markets that they can expand their business into new terrains. Starbucks is also looking to expand into new related product lines that can help them in achieving the long term goal of the organization. They are also looking at entering into strategic partnerships with third party organizations like united airlines and Hyatt Hotels (Barnett &Hyde, 2013). One of the things that the management in this case has to take care of is that they will have to ensure that they minimize the cannibalization of their own brands and hence Starbucks has special arrangements with organizations in avoiding cannibalization of its own brands (Armstrong, 2009). They have had a bad experience in entering into business that was not their core competencies as they were trying their hands on various life style products and .com companies at the start of 2000s (Dass &Parker, 2009) They later realised that it is always better to be the best in the domain where their core competency lies and hence moved out of these ventures and started concentrating on their core competency of retailing. Now the top management has made it clear that they would venture into only those operations that would complement their core business operations. While deciding the future course of action and designing the strategy, for a brand like Starbucks that is already made it big on the global stage, they will have to be extra careful as one wrong step can affect the brand name and reputation that they have earned over a period of time (Lynch, 2012).
The structure of an organization is the manner in which the organisation operates and organized. Starbucks has a flexible organizational structure that enables them to deal with the uncertainties in the economies that they are entering into. The management has a made a conscious decision of making the organisational structure nimble and flexible so that they can make changes in the dynamic markets that they are entering into (Pascale &Athos, 2009). Starbucks believes that the employees plays an important part in their brand building process and it is they who are responsible in differentiating the brand from others in the market and hence they refers to their employees as partners and gives them several benefits like the health coverage and the stock options (Fried& Linda, 2010). One of the stated positions of the organization is that they will have to invest in quality manpower and training them to become the face of the brand and this would help them in ensuring that the values that they stand for are being propagated in a much more effective manner as compared to any advertising efforts by the company(Martins &Terblanche,2011)
Systems in a Mckinsey’s 7s framework essentially refers to the systems and processes that the organization relies upon to give the competitive advantage and Starbucks pays special attention to get its systems and operations in line with the strategy that they have. They make sure that the employees are well aware of the products that they sell as it is essential in imparting the Starbucks experience to the customers (Alvesson, 2010)They also have made checks to ensure that the service delivery mechanism in a particular country is consistent in nature and there are no major deviations from it. They have implemented a strong supply chain mechanism that would ensure that they get quality supply of coffee beans and of the same quality all-round the year (Arthur, 2012). They have the economies of scale and this has enabled them to get in touch with the coffee farmers and source directly from them rather than depend on dealers. They also have ensured that there are strict checks on the quality of the coffee beans that are being sourced so as to ensure that they don’t compromise on quality (Waterman et al, 2010)
This refers to the capabilities that differentiates the company from the competition and at the same time enables them to carry out task that would lead them to achieve their organizational goals. Starbucks gives special importance to make sure that their employees are well trained and are capable to provide the Starbucks experience that they wish to provide. They have made it mandatory for all its employees to undergo training on how the coffee beans are sourced roasted and processed so that they are knowledgeable when it comes to dealing with the customers. The hiring process of Starbucks is in line with the talent pool that they wish to have and the top management has made sure that the HR managers are an important part in the decision making process as they are the ones who gets the human capital on board and Starbucks is one of those organizations that emphasises on the skill development of the employees to create a differentiating edge over its competition (Boyle, 2013).
This refers the quality of the staff that an organization has and the systems that are related to managing the staff (Purcell& Boxal, 2010). By means of extensive training mechanisms given to the employees, they have ensured that the employees themselves would be the brand ambassadors who would take the Brand Starbucks forwards by imparting a different experience to the customers and at the same time they have been one of the best employers in the retail space by giving good perks to the employees by allowances and other attractive compensation. This has resulted in a very low employee turnover for the organization and thus the need to fill in the gaps that are left by the employees leaving the organization is less. Multiple employee satisfaction surveys have showed that the employees of the Starbucks have a sense of well-being within the organisation that results in a positive work culture within the organization. The vision of the organization is embedded in the daily lives of the employees as they are trained to work in a particular fashion (Fried & Linda, 2010)
This refers to the style of operation of the business and how an organization deals with the external environment does. Starbucks has been one of the organizations that are flexible and open about doing business. This is one of the most trusted and loved brands across the world. By their style of operations they have managed to become one of the lifestyle entities rather than a coffee chain across the world.
Boyle, S. 2013, Impact of Changes in Organisational Structure on Selected Key Performance Indicators for Cultural Organisations, International Journal of Cultural Policy, Vol. 13, No. 3, pp.319–334. Order Now