EXAM PREPARATION 2

STRATEGIC MARKETING MANAGEMENT

Explain McKinsey 7-S framework for analysing and improving

organisational effectiveness
This framework basically deals with organizational change. The main thrust of change is
not connected only with the organization's strategy. It has to be understood by the complex
relationships that exist between strategy, structure, systems, style, staff, skills and super-
ordinate goals. These are called the 7-S of the organization.
The 7-S framework suggests that there are several factors that influence an
organization's ability to change. The variables involved are interconnected so that altering
one element may well impact other connected elements. Hence, significant changes cannot
be achieved in any variable without making changes in all the variables. There is no starting
point or implied hierarchy in the shape of the diagram, so it is not obvious which of the 7
factors would be the driving force in changing a particular organization at a particular point
of time. All the elements are equally important. The critical variables of change could be
different across organizations. They could also be different in the same organization.
Fundamentally, the framework makes the point that effective strategy implementation is
more than an individual subject, but is coupled with skills, styles, structures, systems, staff
and super-ordinate goals.
1. Super-ordinate Goals
"Super-ordinate goals" mean the "goals of a higher order which express the values, vision
and mission that senior management brings to the organization". These can be considered as
the fundamental ideas around which a business is built. Hence, they represent the main
values and aspirations of an organization. They are the broad notions of future direction.
They can be considered to be equivalent to organizational purposes
2. Structure
"Structure" means the organizational structure of the company. The design of
organizational structure is a critical task of top management. Organizational structure refers
to the relatively more durable organizational arrangements and relationships. It prescribes
the formal relationships among various positions and activities, communication channels,
roles to be performed by various members of an organization. Structure is the way in which
a company is organized- chain of command and accountability relationships that form its
organizational chart.
Organizational structure performs four major functions:
 It reduces external uncertainty.
 It reduces internal uncertainty due to variable, unpredictable and random human
behaviour.
 It provides a wide variety of devices like departmentalization, specialization,
division of labour, delegation of authority etc.
  It helps in coordinating various activities of the organization and focus on its
objectives.

3. Systems
"Systems" mean the procedures that make the organization work. They include the rules,
regulations and procedures, both formal and informal, that complement the organizational
structure. Systems include production planning and control systems, cost accounting
procedures, capital budgeting systems, performance evaluation systems etc. "Often, changes
in strategy require changes in systems.
4. Style
Style" means the way the company conducts its business. Top managers in organizations
can use style to bring about change. Organizations differ from each other in their "styles of
working. The style of an organization, according to the McKinsey framework, becomes
evident through the patterns of actions taken by the top management team over a period of
time. Thus, an important part of managing change is establishing and nurturing a good 'fit'
between culture and strategy. The attitude of senior employees in a company establishes a
code of conduct through their ways of interaction and symbolic decision making, which
forms the management style of its leaders.
5. Staff
"Staff" refers to the pool of people who need to be developed, challenged and encouraged.
It should be ensured that the staff has the potential to contribute to the achievement of goals.
Three important aspects about staff are:
 Selecting meritorious people for specific organizational positions.
 Developing abilities and skills in them, to take up challenging assignments.
 Motivating them to give their best to achieve strategic goals.
6. Skills
Skills" are the most crucial attributes or capabilities of an organization. Skills in the 7S
framework can be considered as an equivalent of "distinctive competencies”. For example,
Hindustan Lever is known for its marketing skills, TELCO for its engineering skills, IBM
for its customer service, Du Pont for its research and development skills and Sony for its
new product development skills. Skills are developed over a period of time and are a result
of a number of factors. Hence, to implement a new strategy, it is necessary to build new
skills. Skills form the capabilities and competencies of a company that enables its
employees to achieve its objectives.
7. Strategy
"Strategy” is the long-term direction and scope of an organization. It is the route that the
company has chosen to achieve competitive success.
Alignment of the Framework
Successful implementation of strategy requires the right alignment of different elements
within the organization. The McKinsey consultants call strategy, structure, and systems as
the "hard elements of the organization and the other 4Ss i.e. style, skills, staff and super
ordinate goals as the "soft elements of the organization. The hard elements are more
tangible and definite, and so they are often the ones that gain the greater attention, however,
the soft elements are equally important, even if they are less easy to measure, assess and
plan.
Merits of 7-S Framework
The virtue of 7-S framework is that it highlights some important organizational
interconnections and their role in affecting change. It illustrates, in a simple way, that the
real task of implementing strategy is one of bringing all 7-Ss into harmony. When the 7S are
in good alignment, an organization is poised and energized to execute strategy to the best of
its ability
Secondly, the McKinsey's model provides a convenient checklist for judging whether an
organization is ripe for implementing strategy. It also helps in diagnosing why the results
emanating from the implementation of a strategy fall short of expectations and therefore,
what Dew 'fits' would be required.
Thirdly, the framework also helps strategists in evaluating their organizations along each
of the seven dimensions, thereby identifying organizational strengths and weaknesses,
Finally, McKinsey's 7-S framework is a powerful expository tool. However, it should be
remembered that changing the organizational elements is not an easy task. But that should
not stop one from striving to bring about change.
Limitations of 7-S Framework
The 7S framework shows that relationships exist and it provides some limited clues as to
what constitutes more effective strategy implementation. Beyond this, however, it is not
precise. For example, the framework says little about the how and why of interrelationships.
The model is therefore poor at explaining the logic and methodology in developing the links
between the elements.
A further weakness is that the framework does not highlight or emphasize other areas that
have subsequently been identified as being important for strategy. Those areas are:
 Innovation
 Knowledge
 Customer-driven service
 Quality
The above elements are equally important for any organization to succeed. In spite of the
above limitations, the 7-S framework provides a way of examining the organization and
what contributes to its success. It is good at capturing the importance of the links between
the various elements. That is why McKinsey consultants used it as a starting point for their
search for more detailed interconnections.

McKINSEY’S 7-S MODEL

Explain with relevant example the integration of marketing strategies and

their application to different business sectors
A marketing strategy refers to a business's overall game plan for reaching prospective
consumers and turning them into customers of their products or services. A marketing
strategy contains the company’s value proposition, key brand messaging, data on target
customer demographics, and other high-level elements.

Following are the different types of marketing strategies available.

1. Paid advertising

This includes multiple approaches for marketing. It includes traditional approaches like
TVCs and print media advertising. Also, one of the most well-known marketing approach is
internet marketing. It includes various methods like PPC (Pay per click) and paid advertising.

2. Cause marketing

Cause marketing links the services and products of a company to a social cause or issue. It is
also well known as cause related marketing.

3. Relationship marketing
 This type of marketing is basically focused on customer building. Enhancing existing
relationships with customers and improving customer loyalty.

4. Undercover marketing

This type of marketing strategy focuses on marketing the product while customers remain
unaware of the marketing strategy. It is also known as stealth marketing.

5. Word of mouth

It totally relies on what impression you leave on people. It is traditionally the most important
type of marketing strategy. Being heard is important in business world. When you give
quality services to customers, it is likely that they’d promote you.

6. Internet marketing

It is also known as cloud marketing. It usually happens over the internet. All the marketing
items are shared on the internet and promoted on various platforms via multiple approaches.

7. Transactional marketing

Sales is particularly the most challenging work. Even for the largest retailers, selling is
always tough especially when there are high volume targets. However with the new
marketing strategies, selling isn’t as difficult as it was. In transactional marketing the retailers
encourage customers to buy with shopping coupons, discounts and huge events. It enhances
the chances of sales and motivates the target audience to buy the promoted products.

8. Diversity marketing

It caters diverse audience by customizing and integrating different marketing strategies. It

covers different aspects like cultural, beliefs, attitudes, views and other specific needs.