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McKinsey 7S Model Factor Analysis of Amazon Inc.

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Amazon McKinsey 7S Factor Analysis

Amazon McKinsey 7S model illustrates the ways in which seven elements of businesses can be united to increase effectiveness. McKinsey 7S model stresses the presence of strong links between elements. Specifically, it argues that a change in one element causes changes in others. Shared values are positioned at the core of Amazon McKinsey 7S model, since shared values guide employee behavior with implications in their performance.

Hard Elements

Strategy: Amazon adheres to cost leadership business strategy. The largest internet retailer in the world has been able to sustain this strategy thanks to economies of scale, innovation of various business processes and a constant business diversification. Moreover, Amazon business strategy places a great emphasis on encouraging communication between various components of its ecosystem. These elements of Amazon ecosystem include merchants, writers, reviewers, publishers, apps developers, and the information market of commentators, analysts, journalists and feature writers (Dudoyskiy, 2017).

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Structure: Amazon organizational structure is hierarchical. It is difficult for the company to adapt an alternative structure such as divisional or matrix due to its gigantic size. There are two CEOs, three Senior Vice Presidents and one Worldwide Controller, who report directly to Amazon CEO Jeff Bezos. Additionally, Amazon organizational structure integrates seven segments such as information technology, human resources and legal operations and the heads of segments also report to Amazon CEO (Dudoyskiy, 2017).

Systems: There is a wide range of systems that facilitate Amazon business. These include employee recruitment and selection system, team development and orientation system, transaction processing systems, customer relationship management system, business intelligence system, knowledge management system and others. The company critically evaluates each of these systems in a regular manner with the aim of increasing their efficiency and thus, increasing competitive advantage for the business (Dudoyskiy, 2017).

Read More: Amazon Goes Global Case Study Analysis

Strategy is a plan developed by a firm to achieve sustained competitive advantage and successfully compete in the market. Amazon’s competitive advantage has propelled Amazon the becoming the largest online retailer in the world. Amazon has one of the best logistical chains in the retail which provides it’s a completive advantage.

Shared Values are at the core of McKinsey 7s model. They are the norms and standards that guide employee behavior and company actions and thus, are the foundation of every organization. Amazon’s culture of working hard and playing hard in an environment that rewards innovations and success.

Structure represents the way business divisions and units are organized and includes the information of who is accountable to whom. All staff is held accountable for his responsibilities Amazon organizational structure is hierarchical. Amazon is a drill down approach and all organizations are aligned with the CEO

Systems are the processes and procedures of the company, which reveal business’ daily activities and how decisions are made.

Skills are the abilities that firm’s employees perform very well. They also include capabilities and competences.

Staff element is concerned with what type and how many employees and organization will need and how they will be recruited, trained, motivated and rewarded. Amazon continues to cultivate its talent and reward them with phenomenal promotional opportunities for innovation and exceptional performances.

Style represents the way the company is managed by top-level managers, how they interact. Amazons employees share the vision of the their leadership and with informal attire to assist staff with being comfortable and to help maximize performance

Recommendation: Organizations can become over-confident and fall into a one-track thinking process. Amazon must continue to be innovative and utilize exploration as a path to changing or continue being the world’s largest retailer. Amazon has utilize the concept of convenience to attract and keep customers. Amazon biggest competitor is Amazon and it ability to stay focus on innovation. Leadership must continue to be clear about its vision and goals, clarity from the top to the bottom has been a winning formula for Amazon.
Dudovskiy, John (2017). Research Methodology. Amazon McKinsey 7S Model.

Reply

I agree with this statement that employees are the base of any organization. Employees work on the strategies and process made and regulated by the mangers of the organization. Employees are those who worked very much efficiently for the organization as they are those who make the products in which that organization is actually dealing. The products or services that your organization deals in are controlled by the employees of your organization because an employee works on it. Only employees knows this that what are the right way of doing this task or to which they should avoid doing because it causes loss to their products as well as.

An employee knows that they are the main source of making the new products and offering new services on behalf of the company. The employees should be treated properly and efficiently as they are holding all the operations of the organization. The employees when do not treated well then they only do one thing and that is they do not work in that organization as well as they do not feel comfortable on working in this organization any more. The employees are those who if do not find proper facilities and opportunities that makes them comfortable and relaxed in such organization while working.

The Amazon company handless its employees very much efficiently and as well as very much sensitively because Amazon is on the top now a day just because of their employees working in the organization. The Amazon Company is one of those companies that deals in the online sales of the products related to every product that people uses in their daily life. The Amazon Company delivers products to people at their door steps their employees are very much efficient and fast that they deliver the products on time to the people who wanted them.

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