Boston Communications Consulting 7S Framework Crystal Diane Byrd Spring 2003

Agenda Case for Market Entry Factual Overview and reasons for selecting the 7S framework Essence of the Framework Application of 7S Framework to the company’s problem Recommendations Lessons Learned

Case for Market Entry Case 4.2 Boston Communications Consulting Co. has grown from 3 consultants to 100 in 2 years. It is now preparing to expand overseas and work with global clients. How would you help the firm develop a strategy and what would you recommend? Mckinsey 7-S Framework – strategy, structure, systems, style, staff, skills and shared values

Factual Overview Functions/Uses of 7-S-Model Used for internal analysis of a company Analyze strategic characteristics of a company Tool for determining the “doability” of strategies Used to create alignment among various departments of an organization Examines effect of change on a company Analyze the “successful and dysfunctional” aspects of an organization

Factual Overview con’t Weakness Focuses on internal fit of an organization Ignores effect of factors external to the organization Why 7-S Model Profitable, “purposeful, efficient organizational action” cannot be successfully executed if internal elements are not aligned

Essence of the Framework “Hard S” - rational and factual aspects: focuses on Strategy, Systems, and Structure Strategy – a plan of action to maintain competitive advantage over the competition Systems – measures and actions which accommodate the execution of daily activities Structure – the way the organization is structured, who reports to whom

Essence of the Framework “Soft S” - social and interpersonal behavior: focuses on Style, Shared Values, Staff, and Skills Style – leadership style Shared Values – company culture, work ethics etc Staff – company employees and their capabilities Skills – core competencies of the company as well as that of its staff

Application of the Framework - Strategy Global strategy Standardization of products, processes and operation around the world Multidomestic strategy Adjust products and operations according to each country or market served Source: Strategic Management. Pitt and Lei, 2003

Application of the Framework - Systems

Application of the Framework – Structure Geographic Division Structure Hierarchical -Two way open communication Self contained product/function to meet local needs Promotes a high level of decentralization Corporate - US Region 1-London Product/Function Region 2- Germany Product/Function

Application of the Framework –Style The competitive executive Flexible and adaptive to Stakeholders needs Seizes and exploits opportunities Focuses on increasing the company’s share of market at a profit

Application of the Framework – Shared Values Maintenance of the firm’s corporate culture globally Strong work ethics among new employees Healthy balance of competitiveness and cooperation amongst applicants

Application of the Framework - Staff Recruitment of new consultants in their respective countries Attract experienced employees at other firms Offer incentives which should be determined by the culture of the country Provide additional training

Application of the Framework - Skills Skills for an International Market Communication, Administrative, Finance and Accounting, Customer Service, Marketing, Product Development, IT High Level of linguistic capabilities Examine foreign recruitment opportunities Seek the best job techniques for individual countries Exposure of US based consultants to the global marketplace

Recommendations Consider application of a framework which includes external considerations – SWOT Open offices in UK and Germany since competition is not very strong here Avoid France since Cap Gemini is already an established presence and would be a formidable competitor Form an alliance or partnership with an already established smaller firm in the consulting industry Do extensive market analysis to determine market profitability, the competition, the governmental or legal restrictions, and requirements in these countries

Lesson Learned It is best to apply two frameworks to a case before making a decision 7s framework pertains to the internal alignment of a firm helping them to work towards shared goals and values There are considerable challenges to global expansion – capital, labor, government regulations, tax Companies need a strong, competitive global strategic plan You must take into consideration cultural, language and customer differences