Growth Strategies - W - Frec139

Organizational Growth
Strategies
Paul Newton
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2 ORGANIZATIONAL GROWTH STRATEGIES
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ORGANIZATIONAL GROWTH STRATEGIES 3
Preface
This eBook describes five models of organizational growth. The most
successful organizations are continually reviewing their operational
processes and strategies to ensure future growth and you can use these
models to help you to see the growth opportunities for your organization.
It describes the following:
 The McKinsey 7-S Framework
 Miles & Snow’s Organizational Strategies
 Mintzberg’s Organizational Configurations
 McKinsey’s Seven Degrees of Freedom for Growth
 Mullins’ Seven Domains Model
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Table of Contents
Preface 3
Visit Our Website 3
Introduction 5
The McKinsey 7-S Framework 7
Miles & Snow’s Organizational Strategies 14
Mintzberg’s Organizational Configurations 20
McKinsey’s Seven Degrees of Freedom for Growth 26
Mullins’ Seven Domains Model 32
Other Free Resources 38
References 39
Introduction
This eBook describes five models of organizational growth that you can use
to help you to see the growth opportunities for your organization.
1. The McKinsey 7-S Framework
Organizations must ensure that all its actions are designed to

help it move closer and closer to its stated goals. To be
successful all business units within the organization must work
cohesively as a unit checking off goals one at a time.
The McKinsey 7-S Framework uses seven components -
Strategy, Structure, Systems, Shared Values, Skills, Style and
Staff - to develop your organizational strategy and attain its
ultimate goal.
2. Miles & Snow’s Organizational Strategies
Miles and Snow’s Organizational Strategies tool enables you to

match up organizational goals with its ongoing strategies. The
four unique strategies - Prospector, Defender, Analyzer and
Reactor - presented in this tool offer considerable guidance to
management ensuring that all actions taken are working toward
the same desired result.
3. Mintzberg’s Organizational Configurations
Mintzberg’s Organization Configurations can help business

owners and managers to understand how to set up their
operation based on what they are trying to accomplish. The
model has five ‘organization’ structures – Entrepreneurial,
Machine, Professional, Divisional and Innovative - to help
management determine, which is the most effective for them
based on their specific goals and market.
4. McKinsey’s Seven Degrees of Freedom for Growth

The Seven Degrees of Freedom for Growth tool from McKinsey

helps organizations and management to think creatively about
how they can expand. It outlines seven unique ways an
organization can achieve growth. The final option adopted by
management will depend on several things, for example, the
market sector, the ‘health’ of the organization etc.
5. Mullins’ Seven Domains Model
Mullins’ Seven Domains model has been specifically designed to

help those thinking about starting up a new venture so that the
organization is structured in the most efficient way for long-term
success. It divides the domains into macro and micro aspects,
with the latter relating directly to you and your team.
The McKinsey 7-S Framework

Every organization needs to have specific objectives, or goals, that it is
striving to achieve. Without these targets in place, it is easy for a business
to just ‘wander’ from day to day, without ever making any headway in the
market. If your company is going to not just scrape by, but actually thrive
moving forward, you want to have clear and measurable objectives that you
are working to achieve.
All actions Organization to

Its objectives
must be
& goals for an ensure
aligned to Success
Of course, it is one thing to have objectives in mind that you would like to
reach – but it is another thing entirely to actually have your organization
aligned correctly in order to achieve those goals. No matter what size of
organization you happen to be running, it is imperative that all actions within
the company are designed to help move closer and closer to your stated
goals.
It is common for businesses to ‘lose their way’ while trying to do too much,
or too many different things. The businesses that are successful in the end
tend to be those who work cohesively as a unit to check off goals one at a
time.
With that in mind, one of the best business models available to help you
stay on the same page throughout your company is the McKinsey 7-S
Framework.
McKinsey 7-S Skills Style

Framework
Shared
Strategy Staff
Values
Ensures a
Structure Systems
company is
aligned to its
goals
As the name would indicate, there are seven components to this model,
each beginning with the letter ‘s’. Those components are as follows –
 Strategy
 Structure
 Systems
 Shared Values
 Skills
 Style
 Staff
Each of these plays an important role in the ultimate destination of the

company over the long run. If you are out of alignment within your business
on even one or two of these points, there could be trouble waiting ahead.
Below, we are going to take a quick look at each of these seven

components to better understand how they impact the direction of the
company as a whole.
Strategy
This one should be pretty self-explanatory, as all organizations should have
a clearly defined strategy in place for how they are going to beat the
competition. If you don’t have a good strategy already in place for your
business that should quickly become one of your top priorities.
Defines how
you seek to
Gain
competitiv
e
advantage
Strategy
You have to seek out and obtain some kind of competitive advantage in the
market if you are going to consistently bring in revenue and grow your
company. Some basic strategy examples are entering the market at the
lowest possible price point, or entering the market with a high-quality, high-
priced item.
Structure
The design of your organization from a structural standpoint has a lot to do
with how successful you can be in reaching your goals.
Who answers to whom within the company?

How to the various departments interface with one another?
There needs to be a clearly defined structure in place to make sure that time
is not wasted trying to determine who can make decisions on a given
matter.
Systems
Each day, business is conducted within your office in a certain fashion. The
way things are done can be referred to as the systems that you have in
place. Obviously, it is a big advantage to be as efficient as possible when it
comes to the design and execution of your systems.
must ensure operation of its

Systems the efficient organization
Are employees wasting time doing tasks that are redundant in nature? Are
you spending too much money on outsourcing a task that could actually be
done in-house? Refining systems is an important part of your organizational
success.
Shared Values
You can think of this point as being ‘what the company is all about’. Some
organizations strive to produce the highest quality products on the market,
and that is a mission that is shared throughout the business. Or, other
companies may strike to do their work in a way that not only makes money,
but also does good things for the environment or the community (or some
other ‘greater good’).
Style
You want to have a clearly established leadership style within the business
to ensure that all employees know what to expect, and know what is
expected of them. Some companies are run tightly, with plenty of oversight
and control in place. Others choose to put more trust in their employees to
get the job done without assistance.
Style of Leadership
must suit market & level of skill

product offering employees require
The right choice for your business likely depends on the specific industry
you are in, as well as the skill of those employed by the company.
Staff
Speaking of employees, they naturally play a large role in this equation as
well. With the right people in place, working toward the goals of the
organization should become a relatively easy task. However, if your
company lacks the skills in key areas to get the job done right, you may
struggle even if you are hitting on the other six points on this list.
Staff
Need right skills, knowledge & Organizations need to invest in

attitude their development
There is no substitute for talented and invested employees. Also,

experience is a critical part of having a quality team, so keeping people
around for many years will help you to get the most from your employees.
Skills
What skills do you have available to you within the staff that is currently
assembled? What are they capable of, and where are they lacking?
Knowing the skills that you have on hand will help you make hiring
decisions, as you can choose new employees who ‘fill in the gaps’ that exist
in your current team.
Know skill set Outsource,

Recognize any
Skills within
'skills gap'
train or recruit
organization to fill this gap
Also, you may decide to outsource some of your work from time to time
based on need, and you can do so with a thought toward getting help in
areas where your own team is less-capable.
Working through the McKinsey 7-S Framework is a great way to gain an

overall understanding of your business and what it is capable of achieving.
By having clear organizational goals in place, and then using this framework
to understand where you are headed, it should be possible to make
adjustments as necessary to steer the business in the right direction.
Success doesn’t happen by accident in the real world – it happens through

hard work, careful planning, and a commitment to reaching the ultimate
objective of the organization.
Key Points
- The McKinsey 7-S Framework is a tool designed to help business
owners and managers understand how aligned their organization
is, and where it can be approved.
- The framework is most often used as an organizational analysis
tool to assess and monitor changes in the internal situation of an
organization.
Key Points cont.

- It is based on the theory that, for an organization to perform well,
seven elements need to be aligned and mutually reinforcing. They
are:
- Strategy – Purpose of the business and the way the organization
seeks to enhance its competitive advantage.
- Structure – Division of activities; integration and coordination
mechanisms.
- Systems – Formal procedures for measurement, reward and
resource allocation.
- Shared Values – The overall culture of the company, and the
purpose behind everything that is done.
- Skills – The organization’s core competencies and distinctive
capabilities.
- Staff – Organization’s human resources, demographic,
educational and attitudinal characteristics.
- Style – Typical behavior patterns of key groups, such as
managers, and other professionals.
- The framework can be used to help identify what needs to be
realigned to improve performance, or to maintain performance
during other types of change.
Miles & Snow’s Organizational Strategies

To succeed in any competition requires a strategy. It doesn’t particularly
matter where you are competing, or what you are competing in, you are
going to need a strategy if you are to come out on top.
Strategies &
Activities
need to support & match the
desired organizational goal
That concept is true in sports, and it is certainly true in business. Even

companies with the best products in the world need a sound strategy in
order to make sure those products wind up in the hands of as many
consumers as possible. An organization without a clearly defined strategy is
destined to fail.
In order to match up your organizational goals with the strategies that you
use on an ongoing basis, it may be helpful to consult with Miles and Snow’s
Organizational Strategies tool.
Prospector Defender
Miles & Snow's Organizational Strategies
Analyzer Reactor
The ideas presented in this tool can be greatly helpful when trying to ensure
that all actions taken within an organization are working toward the same
desired result. If a company’s strategy does not make sense of the goals
that it has in place, it will be difficult to reach a satisfactory conclusion.
Miles and Snow identify four unique strategies that are used by
organizations. Below we will quickly look at each of these four, and what
they say about the underlying business.
Prospector
When an organization falls into the category of Prospector, they are
expected to consistently be on the forefront of innovation and development.
Rather than sitting still with products that have been previously developed
and taken to market, prospecting organizations are always seeking to create
the ‘next big thing’.
Organizations with a
Prospector are innovators &
Strategy developers
By definition, this type of organization is going to have some huge

successes, and they are also likely to have some big misses as well. The
goal, of course, is to have the hits outweigh the misses, so that the
company can continue to afford to innovate well into the future.
Technology companies often fall into the category of Prospector, but not
always. Some tech companies continue to push the envelope, trying to lead
the way in new product development – which can force the competition to
constantly play catch up. However, other tech companies will simply rest on
what they have done and ride it out for maximum profits until the market
moves on to something else.
Defender
As the name would indicate, this is an organization that is satisfied with their
current place in the market – and they are going to work hard to defend it as
the years go by. Instead of investing time and money into trying to develop
new products to take to the market, this kind of an organization is going to
sit back and reap the rewards of what they have already created.
often are in a mature

Organizations Defender market where less chance
with a Strategy to innovate, so seek profits
or revenue
Of course, no one can stay in business by sitting still, so it will be necessary

to make at least modest improvements along the way to remain relevant
and competitive. Often, these developments come ‘behind the scenes’ in
the form of manufacturing improvements, cost savings, etc.
It should be noted that a firm does not have to remain in just one of these
strategy categories for its entire existence. It is quite common for firms to
shift from one to the other as markets develop.
Commonly, companies that were once considered innovative in their space

will slide gradually into defender territory as less and less innovation is
possible in their given market. Understanding when and how to shift from
one strategy to another is crucial if profits and market share are to be
maintained.
Analyzer
In many ways, organizations that land in the analyzer category are a blend
of the first two options on the list. These tend to be some of the biggest
companies around, as they have the capacity to both develop new
technologies and products as well as defend the market for those they have
already created.
are large corporations, often

Organizations Analyzer market leaders that build on
with an Strategy others innovations & develop
new products
When you think of the biggest brand names in the world, many of them are
going to fit nicely under the analyzer definition.
Usually, the companies that are true analyzers will not actually be the first to
create something, but they may instead improve upon the creation of
another firm. Therefore, they are innovators to a degree, but not in the truest
sense of the word. This type of firm will generally sit back, observe the
market and its demands, and then seek to fill those demands as
successfully as possible.
Thanks to their typically large size, this type of company can be late to the
market with a specific product and still be successful in the end.
Reactor
The final category on the list, are those firms that land in the reactor
category really have no one specific approach to their business. It should go
without saying that organizations generally do not want to fall into the
reactor class, as this means that they are simply trying to catch up with the
market as things change over time.
Reactor have no specific approach

Organizations
just react to market
with a Strategy changes
Taking a reactive approach to business is how many large companies wind

up losing market share over time. Even businesses with great ideas,
products, and employees can wind up lagging behind if their management
team takes a reactive approach to their decision making.
It is nearly inevitable that companies who react to the market are going to
be passed up by the organizations who innovate, defend, or analyze
successfully.
It is important to know where your organization fits within this framework.

Once you have a clear picture of which of these four ways you are going to
use to compete in the market, you can then structure the design of your
operations in a way that will suit the strategy you have taken.
An
Organization
moves
Reactor between
Strategies in
response to
Analyzer
market
changes
Defender Protector
For instance, as company that wants to innovate is going to need plenty of

creative thinkers within the organization in order to actually lead the way in
terms of new creations. Without the right people, or the proper
infrastructure, it is hard to successfully execute your intended strategy over
the years to come.
Key Points
- Miles and Snow suggest that business level strategies generally
fall into one of four categories: prospector, defender, analyzer, and
reactor.
- A Prospector is innovative and growth oriented, searches for new
markets and new growth opportunities, and encourages risk
taking.
- A Defender protects their current markets, maintains stable
growth, and serves current customers.
- An Analyzer maintains current markets and current customer
satisfaction with moderate emphasis on innovation.
Key Points cont.

- A Reactor has no clear strategy but reacts to changes in the
environment and drifts with events.
- The ideas presented in this tool can be greatly helpful when trying
to ensure that all actions taken within an organization are working
toward the same desired result.
Mintzberg’s Organizational Configurations

There is no one right organizational configuration for all businesses. The
best way to arrange one business could be completely wrong for another,
based on a variety of factors.
Mintzberg’s Helps Most efficient based on

Organization management structure of their its goals &
Configurations determine Organization market
It is up to the management of any organization to determine exactly what

kind of structure is going to be most effective based on the market, goals,
and more of that particular business. Many companies have fallen short of
their goals – or failed altogether – simply because they weren’t organized in
a manner that made sense for the job at hand.
Mintzberg’s Organization Configurations can help business owners and

managers to understand exactly how they should be setting up their
operation based on what they are trying to accomplish.
Mintzberg’s
Entrepreneurial Machine
Organization Organization Organization
Configurations
Professional Divisional Innovative

Organization Organization Organization
There are five structures outlined within this model, each of which is
highlighted below.
The Entrepreneurial Organization

Many a business – in fact, most businesses – start out in this manner. An
entrepreneurial organization is one that has a very simple, straightforward
design and decision-making process.
When a company is started, there is generally one owner – or maybe a few

owners – who make all of the decisions. As the company grows, the
ownership tends to maintain managerial control for an extended period of
time. While large organizations will eventually grow out of this model, many
companies exist in this form throughout their life cycle.
•Owner / Management
Entrepreneurial •Simple decision making process
Organization •Able to take quick action
The advantage of running an organization in an entrepreneurial fashion is

the ability to take quick, decisive action. Since there are very few steps to go
through in order to make a decision, the company can respond to the
market almost immediately – as long as the owner or manager at the top is
making wise choices.
Since there isn’t the ‘red tape’ to deal with that can exist in larger, more
complex organizations, this type of company is agile and nimble in the
marketplace.
The Machine Organization

In many ways, this type of organization stands in complete contrast to the
entrepreneurial company. This business is one that has a long list of well-
defined procedures that are going to be followed each and every day.
Efficiency is the name of the game when it comes to a machine
organization, as the process that has been created has been designed with
efficient operation as its top priority.
As you would imagine, changing directions is not something that this type of
company does well. Moving on a new track means redesigning most or all
of the systems that have been created, and that process will take time and
effort.
Machine
Organization
•Numerous & well defined
processes
•Set up for efficiency
•Ability to change is slow
Generally, it is companies who need to do the same thing day after day –
such as produce a specific product on an assembly line – that will work best
as machine organizations.
The Professional Organization

A company that is made up of a collection of professionals who possess
expertise in their own fields is likely to fall into this category. While this type
of organization can be orderly just as with the machine organization, in this
case the individual professionals are going to expect to be able to operate
with a certain level of autonomy.
Highly skilled & experienced

individuals
Who expect degree of Professional

autonomy Organization
Decision making is complex

& drawn out
Decision-making is not handled by a single person, or even by a single

board, as the professionals within the company are going to want to be able
to make their own decisions on a daily basis. Commonly, organizations such

as accounting and law firms will fall into this category, as their staffs are
made up of professionals with plenty of experience in their given field.
The nature of this type of organization leads to it being highly complex. All of
the professionals within the company will want a say in decisions that affect
them personally, so the decision making process tends to be long,
complicated, and difficult to complete.
However, maintaining a staff of highly trained professionals requires that

those individuals be granted at least a modest amount of power, making this
the only viable structure for such an organization.
The Divisional Organization

This is a type of organizational design that is meant to accommodate a
company with a variety of product or service lines that it offers to its
customers. Large companies will frequently fall into this model because they
need to separate the operations of one part of the business from another.
Divisional Organization
Has a variety of
products /
services
Operations need to Divisions have high But, duplications

be separate degree of autonomy can lead to waste
The divisions that fall under the umbrella of the organization as a whole will
have a high degree of autonomy to make their own choices. In this way, the
various brands or products within the business will be able to thrive into the
future, as they don’t have to go along with choices that are made by the
company as a whole.
Unfortunately, this kind of structure can also lead to a good deal of waste,
as there may be functions duplicated between divisions which could have
been centralized and streamlined for efficiency sake.
The Innovative Organization

Moving on to the last type of organization in the model, we find the
innovative organization. At this level, it is creativity that rules the day.
Instead of trying to develop any kind of structure or hierarchy for decision-
making, this kind of organization adapts from day to day based on need.
Innovative
Organization
Consists Who all

of lots of want to
talented input into
experts decisions
May lead to conflict

as no clear power
structure
The core of running a business in this manner is having talented people who
have the knowledge necessary in their specific field to help steer the
organization as a whole in the right direction. Employees tend to enjoy this
type of structure as well, since they will have more input in decisions that
are being made. Naturally, that input can lead to conflict, as the lack of a
clear power structure may lead to struggles for power over time.
Generally, most companies that start out operating in this way will shift into
one of the previously defined structures once they gain experience and find
their way in the market.
The right organizational structure for each business is going to vary based
on a wide range of factors. It is a worthwhile exercise to determine which of
these configurations is going to be best suited to your operation, so you can

then move in the right direction with respect to decision-making, hierarchy,
hiring, and more.
Key Points
- Mintzberg’s Organizational Configurations can help business
owners and managers to understand exactly how they should be
setting up their operation based on what they are trying to
accomplish.
- The model uses five idealized organizational configurations that
managers a framework to understand and design organizational
structures.
- An entrepreneurial organization is one that has a very simple
decision making process in which the business owners make all of
the decisions.
- A machine organization has a list of well-defined procedures that
negate the need for decision-making, which is done ‘by the book’.
- A professional organization is one in which individual professionals
are able to operate with a certain level of autonomy. Accountancy
and law both fall into this category.
- A divisional organization relies on the standardization of outputs
where line managers run independent divisions.
- An innovative organization does not try to develop any kind of
structure or hierarchy for decision-making, but instead adapts from
day-to-day based on need.
- This model is not designed to provide guidance for setting up an
organization’s decision making structure but it can help you to
understand how organizations change over time and how their
decision making structures evolve.
McKinsey’s Seven Degrees of Freedom for Growth

There are a number of different ways in which an organization can choose
to grow. While many companies stick to just one or two proven plans for
how they are going to continue to get bigger, that choice may wind up
limiting them in what they can accomplish into the future.
Expanding Company Growth
Requires creative thinking
To avoid becoming set in its 'ways'
Tool - 7 Degrees of Freedom for Growth
Outlines its unique approaches
Rather than getting stuck in a rut doing the same old things over and over
again, it is beneficial to think creatively about the many ways in which it
might be possible to expand. When a manager or owner is willing to think
outside of the box when it comes to growth, there may be doors open up
that never before seemed possible to access.
To help in the mission of thinking creatively about growth, one can turn to
the Seven Degrees of Freedom for Growth tool from McKinsey. This tool
outlines seven unique ways in which growth can be achieved. Of course,
each of these options will be used with varying degrees of success based
on the market at hand, the current state of the organization, and more.
Let’s take a closer look at each of the seven options.
Selling Existing Products to Existing Customers

This is perhaps the most obvious, but also the most limited, of the options
on the list. By selling to customers who already trust your company, you
have bypassed one of the biggest challenges that face anyone trying to
make a sale. Also, since you are just trying to sell products that are already
in your line, there is not the time and financial requirement that goes along
with developing new goods. However, you can only go so far by selling to
customers who already know your business, so this is a growth model that
isn’t going to sustain you forever.
Acquiring New Customers in Existing Markets

Another popular method, this degree of growth looks at selling the goods
you already make to the same market that you already serve – but to new
customers. It is likely going to take a renewed marketing effort to find this
option to be successful. The marketing systems that you have used
previously have been able to track down one kind of customer within the
market, so changing it up and taking your marketing in a new direction might
be the best option for engaging a new segment of the market as a whole.
McKinsey's
Seven Degrees Moving into new Creating a new
of Freedom for geographies industry structure
Growth
Selling existing Developing new

Opening up a new
products to existing value-delivery
competitive arenas
customers approaches
Acquiring new Each growth

Creating new
customers in existing
products & services strategy must be
markets assessed for risk
Creating New Products and Services

This option for growth is going to be among the most time and cost
intensive, but it also has the biggest potential. You will want to play off of the
products and services that are already popular within your line, so you can
leverage the respect and trust that you have built in the market.
Going in a completely different direction would be like starting a new

company entirely, which comes with an entire other set of challenges. By
playing off what you already do, such as by selling in a related market, you
can continue to build brand loyalty and recognition while having an easier
time getting the new products off the ground.
Developing New Value-Delivery Approaches

Every business wants to deliver value to its customers – that’s the point of
being in business in the first place, and it is how you succeed in business.
So, are there any ways in which you can -
Add value to what you currently offer your customers in order to

make your organization more attractive?
How could adding more value to current or future products lead to
growth?
Common ways to add value include streamlining production in order to

lower prices, or improving the overall quality of the product while keeping
the price constant.
Moving Into New Geographies

It is possible to reach a point of saturation within your current markets if you
have tapped out your marketing efforts. To continue to grow after you have
already drawn everything you can out of your current markets, it only makes
sense to look for new geographical areas in which to compete.
Once your current Gives opportunities

Seeking markets in
market is new geographies
to grow, BUT its
saturated risky
As you would assume, there is plenty of risk associated with this model for
growth, so all actions and investments should be carefully planned and
research before they are undertaken.
Creating a New Industry Structure

Sometimes, growing in business means associating yourself with other
successful, established organizations.
Can you find any companies that would make for a natural fit with
your own to form a partnership of some kind?
You need to have a clear plan in mind for how a partnership or merger is
going to benefit each individual business, because these arrangements can
go wrong when not done correctly.
There has to be value in the deal for your own business, or you will simply
be giving away some of what you have created without getting anything in
return. This is certainly a possible area for growth, but it is one that should
be approached carefully.
Opening Up New Competitive Arenas

This would often be referred to simply as diversification. By moving your
company into new arenas where you can compete for new customers is one
way to open yourself up to the potential for rapid growth.
However, these new arenas are sure to have plenty of their own
competitors, so you can’t take for granted success with this method for
growth.
Opening Up Diversification To succeed

New •New markets
•Must add value
Competitive •New customers
•Beat existing
•New products & competitors
Arenas services
You always have to be able to add value for the customer in order to
succeed, and that isn’t necessarily assured when you enter a new market
that is outside of your realm of experience.
Looking over McKinsey’s Seven Degrees of Freedom for Growth, it is clear

that there is a whole world of possibility out there waiting to be explored. It is
just as clear, however, that there are often risks associated with the push to
expand and growth.
Therefore, all growth efforts must be taken on cautiously, and success can
never be assumed. Only when the growth degree, or degrees, that are
chosen are a good fit for the organization and its goals will the company be
on the right track toward a bigger future.
Key Points
- You can use the Seven Degrees of Freedom for Growth tool from
McKinsey to help you think creatively about how to grow your
existing business.
- Selling Existing Products to Existing Customers: This is perhaps
the most obvious, but also the most limited, of the options on the
list.
- Acquiring New Customers in Existing Markets: Taking your
marketing in a new direction might be the best option for engaging
a new segment of the market as a whole.
- Creating New Products and Services: Selling into a related market
means that you can continue to build brand loyalty and recognition
while having an easier time getting the new products off the
ground.
- Developing New Value-Delivery Approaches: Common ways to
add value include streamlining production in order to lower prices,
or improving the overall quality of the product while keeping the
price constant.
- Moving Into New Geographies: This allows you to continue to grow
after you have already drawn everything you can out of your
current markets.
Key Points cont.

- Creating a New Industry Structure: Can you find any companies
that would make for a natural fit with your own to form a
partnership of some kind?
- Opening Up New Competitive Arenas: By moving your company
into new arenas where you can compete for new customers is one
way to open yourself up to the potential for rapid growth.
- This model can help you to see growth opportunities that are not
immediately obvious.
Mullins’ Seven Domains Model

Most new businesses fail – but you probably already knew that. Why is it
that most new ventures never really get off the ground?
fail from a
lack of
Most planning,
organizations finances &
fail focus
Mostly, it is due to a lack of planning and forethought on the part of the

founder or founders. It is incredibly difficult to succeed in business, and only
those who truly think through their plans to refine them as necessary are
going to be able to track down success in the end.
The model that we are going to look at next – Mullins’ Seven Domains – is
designed to help those thinking about starting up a new venture. Before
even writing out a business plan, it is recommended to review this model
closely.
Mullins Seven
Domains Using 4
Assess the
marco & 3
practicality of
micro
your idea
aspects
Before writing a
You need to business plan to judge your
use a tool to idea's merit
When viewing your idea through this model, you may or may not decide that
you should proceed with your concept. Below is a closer look at each of the
seven domains, which make up this model.
The first four of the domains fall into the category of ‘macro’ aspects as they
relate to factors not within your direct control.
Market Attractiveness
Right off the bat, you are going to look at just how attractive your target
market is as a whole. This is a point, as trying to enter a market that isn’t big
enough to sustain your intended business is a venture that is destined to
fail.
You don’t necessarily want to be trying to create the market on your own –
you want to fill a need where the market is waiting to spend. Is the market
that you are targeting on the rise, or is it already in decline? Chasing a
fading market is going to be tough in the long run.
Mullins Seven Domains Model - 'Macro' Aspects
Sector market
Market Industry Sustainable
benefits &
attractiveness attractiveness advantage
attractiveness
Sector Market Benefits and Attractiveness

At this point you are going to ‘drill down’ a little bit deeper into the market to
address specifically the people you intend to serve. Most products don’t
actually appeal to an entire market, but rather just a subset of that market.
Who are the people within the market that you are going to be
serving, and how many of them are there?
You can easily make a mistake by thinking you are going to serve an entire
market when you are really only targeting a small set of people within that
market. In that case, you are left with a market that is significantly smaller
than expected, and your sales will likely reflect that fact.
Industry Attractiveness
Getting away from just the market itself, you want to look at the industry as
a whole – that means, addressing those businesses that would be your
competition should you decide to move forward.
Industry
Attractiveness Market share?
Product offering?
What is
their...
Added value?
Who would
be your
competitors? Profit margin?
Regulatory body?
Do they
have...
Compliance issues?
Many people overlook this step because they just assume they will be able
to beat out the competition, but that is a mistaken assumption. The industry
leaders at the present time have worked hard for their position, and they are
not going to give it up easily.
Also, it can be a trap to enter an industry that seems too good to be true –
because it probably is. In that case, there is likely a reason that there isn’t
much competition, and you will soon find out that there isn’t much money to
be made in that field.
Sustainable Advantage
This is another point that is often overlooked by the would-be business
owner. To succeed in business, you not only have to build an advantage
over your competition, but you also have to be able to sustain that
advantage in the long run.
What can you do to make sure that your competition doesn’t catch up to you
– or pass you – in short order?
If you are going to develop a unique selling proposition that allows

you to stand out from the crowd, is there any way that you can
maintain that advantage going forward?
If you are quickly going to be copied by a bunch of competitors as soon as

you start to have success, it might not be worth entering the market in the
first place.
The remaining three domains are considered ‘micro’ points that relate
specifically to you and your team.
Mullins
Seven
Domains -
micro points
Mission, Ability to
Up, Down,
Aspirations, Execute on
Across Value
Propensity for Critical Success
Chain
Risk Factors (CSF's)
Mission, Aspirations, Propensity for Risk

When you come to this point, it is time to look inside to understand what
your motivations are, and how you might be able to succeed in this venture.
Are you simply hoping to make a bunch of money, or are you truly
passionate about the business idea itself?
While it is certainly possible to make money in business – that’s the goal in

the end – those financial gains rarely come quickly. More likely, you are
going to have to work extremely hard for very little money at the start. If you
aren’t willing to make that kind of investment, you may be destined to fail.
Also, if you are bringing other people into this venture with you, it is
imperative that they share your motivation and drive.
Ability to Execute on Critical Success Factors

This domain asks you to think carefully about what it is that is going to
determine your success or failure in your venture. What are the key points
that are going to have a large influence on how well your business works
out in the short and long term?
determines critical you & your

What? your What? success Can? team hit all
success factors exist CSF's
Critical success factors (CSF’s) exist in every business, but they change
from organization to organization depending on the market, products, and
more. Is the team you have in place – including yourself – going to be able
to hit on all of the critical success factors well enough to ensure your
success?
Up, Down, Across Value Chain

No business exists on an island. You are going to have to exist within a
value chain if you are going to be successful, and the quality of that chain is
something that should be closely analyzed right up front.
Are you going to be able to get the supplies you need on a reliable
basis, and for a fair price?
Are there distributors who will be waiting and able to move your
products in a way that sustains your model?
These factors are somewhat out of your control, but they have a major
impact on how your organization can fare once it gets off the ground.
Each of the seven domains listed above is incredibly important to the

success of your potential business venture. Take some time to think about
each one and be honest in your assessment.
This tool may not always give you the answers you were hoping to find, but
it can be a great help in making sure you only go forward with business
ideas that have a fighting chance to succeed.
Key Points
- Mullins’ Seven Domains Model is designed to help those thinking
about starting up a new venture.
- Four of the domains fall into the category of ‘macro’ aspects, while
three are considered ‘micro’ points that relate specifically to you
and your team.
- Market Attractiveness: How attractive is the market in terms of size
and maturity?
- Sector Market Benefits and Attractiveness: How attractive is the
sector in terms of size and maturity?
- Industry Attractiveness: Can you compete in this industry? What is
the level of competition?
- Sustainable Advantage: If you develop a unique selling
proposition, can you maintain that advantage in the future?
- Mission, Aspirations, and Propensity for Risk: Are you truly
passionate about the business idea itself and are you happy with
the level of risk it involves?
- Ability to Execute on Critical Success Factors: Is the team you
have in place going to be able to hit on all of the critical success
factors well enough to ensure your success?
- Up, Down, Across Value Chain: Do you have or can you develop
the connections you need to succeed?
- Each of the seven domains listed above is incredibly important to
the success of your potential business venture.
Other Free Resources

The Free Management eBooks website offers you over 500 free resources
for your own professional development. Our eBooks, Checklists, and
Templates are designed to help you with the management issues you face
every day. They can be downloaded in PDF, Kindle, ePub, or Doc formats
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Essential Tools for Success, BCS The Chartered Institute for IT.
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Strategy with MyStrategyLab, Financial Times/Prentice Hall.
Kotler, P., Keller, K.L., Brady, M., Goodman, M., and Hansen, T. (2009),
Marketing Management, Pearson Education.
McDonald, M. and Wilson, H. (2011), Marketing Plans: How to Prepare

Them, How to Use Them, 7th Edition, John Wiley.
Campbell, D., Edgar, D., Stonehouse G., (3rd Ed. 2011) Business Strategy:
An Introduction, Palgrave Macmillan
FT Series (1st Ed. 2013), FT Essential Guide to Developing a Business

Strategy: How to Use Strategic Planning to Start Up or Grow Your Business,
FT Publishing International
Aaker, DA., Damien McLoughlin, D., (1st Ed. 2011) Strategic Market
Management: Global Perspectives, John Wiley & Sons
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2013) Exploring Strategy Text & Cases Pearson
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Competitive Positioning Financial Times/ Prentice Hall
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Routledge

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It describes the following:

 The McKinsey 7-S Framework

 Miles & Snow’s Organizational Strategies

 Mintzberg’s Organizational Configurations

 McKinsey’s Seven Degrees of Freedom for Growth

 Mullins’ Seven Domains Model

Visit Our Website

Visit Our Website 3

The McKinsey 7-S Framework 7

Miles & Snow’s Organizational Strategies 14

Mintzberg’s Organizational Configurations 20

McKinsey’s Seven Degrees of Freedom for Growth 26

Mullins’ Seven Domains Model 32

Other Free Resources 38

1. The McKinsey 7-S Framework

Organizations must ensure that all its actions are designed to

2. Miles & Snow’s Organizational Strategies

Miles and Snow’s Organizational Strategies tool enables you to

3. Mintzberg’s Organizational Configurations

Mintzberg’s Organization Configurations can help business

4. McKinsey’s Seven Degrees of Freedom for Growth

The Seven Degrees of Freedom for Growth tool from McKinsey

5. Mullins’ Seven Domains Model

Mullins’ Seven Domains model has been specifically designed to

The McKinsey 7-S Framework

All actions Organization to

McKinsey 7-S Skills Style

Each of these plays an important role in the ultimate destination of the

Below, we are going to take a quick look at each of these seven

Who answers to whom within the company?

must ensure operation of its

must suit market & level of skill

Need right skills, knowledge & Organizations need to invest in

There is no substitute for talented and invested employees. Also,

Know skill set Outsource,

Working through the McKinsey 7-S Framework is a great way to gain an

Success doesn’t happen by accident in the real world – it happens through

Key Points cont.

Miles & Snow’s Organizational Strategies

That concept is true in sports, and it is certainly true in business. Even

Miles & Snow's Organizational Strategies

By definition, this type of organization is going to have some huge

often are in a mature

Of course, no one can stay in business by sitting still, so it will be necessary

Commonly, companies that were once considered innovative in their space

are large corporations, often

Reactor have no specific approach

Taking a reactive approach to business is how many large companies wind

It is important to know where your organization fits within this framework.

For instance, as company that wants to innovate is going to need plenty of

Key Points cont.

Mintzberg’s Organizational Configurations

Mintzberg’s Helps Most efficient based on

It is up to the management of any organization to determine exactly what

Mintzberg’s Organization Configurations can help business owners and

Professional Divisional Innovative

The Entrepreneurial Organization

When a company is started, there is generally one owner – or maybe a few