Starbucks McKinsey 7S Model
Starbucks McKinsey 7S model is used to highlight the ways in which seven elements of businesses can be aligned to increase effectiveness. According to this model, strategy, structure and systems represent hard elements. At the same time, shared values, skills, style and staff are soft elements. McKinsey 7S model stresses the presence of strong links between elements. Specifically, a change in one element causes changes in other elements. As it is illustrated in figure below, shared values are positioned at the core of Starbucks McKinsey 7S model, since shared values guide employee behaviour with implications in their performance.
Hard Elements in McKinsey 7S Model
Strategy
Starbucks business strategy is based on product differentiation with the focus on the quality of products and services. Moreover, the coffee chain giant effectively positions Starbucks stores as a ‘third place’ away from home and work, where customers can meet friends, relatives or spent time alone. Currently Seattle-based international coffee chain is positioning itself as a digital third place as well.
Technological innovations and intensive integration of technology into various business processes in general and ordering process in particular represent another important aspect of Starbucks business strategy. The launch of Mobile Order & Pay feature, which allows customers to buy without getting in line, the launch of voice ordering app and “sending text message notifications to customers in the Seattle area when their mobile orders are ready”[1] can be mentioned to illustrate this point.
Structure
Starbucks Corporation has a hybrid organizational structure which combines geographic, brand-based and functional hierarchy structures. Operations are divided into North America (USA and Canada) and International (China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America and Caribbean) divisions.
Brand-based divisions, on the other hand, consist of Starbucks, Teavana®, La Boulange®,, Evolution Fresh™, Seattle’s Best Coffee and Tazo Tea brands. The world’s largest coffeehouse chain has a structure of a functional hierarchy integrating many groups organized according to specific business functions.
Systems
There is a wide range of systems that facilitate day-to-day business of the world’s largest coffee retailer. These include, but not limited to 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. Starbucks is also successfully integrating mobile ordering system.
Starbucks Corporation Report contains a full analysis of Starbucks 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 Starbucks. Moreover, the report contains analyses of Starbucks leadership, business strategy organizational structure and organizational culture. The report also comprises discussions of Starbucks marketing strategy, ecosystem and addresses issues of corporate social responsibility.
