Amazon McKinsey 7S Model
Amazon McKinsey 7S model illustrates the ways in which seven key elements of businesses can be united to increase effectiveness. According to this model strategy, structure and systems represent hard elements, whereas shared values, skills, style and staff are soft elements. McKinsey 7S model stresses the presence of strong links between elements. Specifically, it argues that a change in one element causes changes in others.
As it is illustrated in figure below, shared values are positioned at the core of Amazon McKinsey 7S model, since shared values guide employee behaviour with implications in their performance.
Hard Elements in Amazon McKinsey 7S Model
Strategy
Amazon adheres to cost leadership business strategy. Three main pillars of Amazon business strategy are competitive prices, great range and speed of delivery. 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 regular business diversification.
Moreover, Amazon business strategy places a great emphasis on encouraging communication among various components of its ecosystem. These components of Amazon ecosystem include merchants, writers, reviewers, publishers, apps developers, and the information market of commentators, analysts, journalists and feature writers. Additionally, customer obsession and focus on Amazon leadership values represent important cornerstones of Amazon business strategy.
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. Specifically, the e-commerce giant employs approximately 1,3 million people who serve hundreds of millions of customers worldwide.[1] The key features of Amazon corporate structure include flexibility of the business; which is unusual for a company of such a big size and stability in the top management, i.e. little turnover in the senior management team.
Reliance on hybrid project groups in new product development is an important trait of Amazon organizational structure. Hybrid project groups enable the largest internet retailer in the world by revenue utilise knowledge sharing and competence sharing in an effective manner.
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.
The selection system of products to produce under the private label is one of the critical systems that enabled the online retailer to achieve its current behemoth status. Specifically, Amazon uses vast amount of customer data and artificial intelligence to identify best selling products and in no time starts to produce such products under the private label.
Amazon.com Inc. Report contains a full analysis of Amazon McKinsey 7S Model. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Ansoff Matrix and Value Chain analysis on Amazon. Moreover, the report contains analyses of Amazon leadership, business strategy organizational structure and organizational culture. The report also comprises discussions of Amazon marketing strategy, ecosystem and addresses issues of corporate social responsibility.
