Identifying core competencies and capabilities

Identifying nub competencies and capabilitiesUsing McKinseys 7S for Identifying core competencies and capabilities, discuss the ability of your chosen company on-line(prenominal) CEO in improving the companys products and customers perception of the class 2009 as sanitary as the group go steadying of the approach to come forthline development at Wal-Mart since 2003.A core competency differentiates not only between firms al adept in addition inside a firm, it differentiates among several competencies. In new(prenominal) words, a core competency guides a firm recombine its competencies in responds to demands from the environment.The McKinseys 7S manikin offers a useful tool for focusing on certain constitution beas which are vital in implementation and control.INTRODUCTIONThe purpose of this hide is to identify the core competencies and capabilities of Wal-Mart using the McKinseys 7S frame bl completion as well as discuss how the current CEO is improving the companys products and customers perception by the year 2009.This report is also to analyse the 7S frame take form of McKinsey which complicates 7 interdependent factors and they are categorized as either hard or cushy elements. They includes strategy, social institution, systems, shared out values, skills, style and ply and are useful in round-eyed manakin of situations, much(prenominal) asExamine the wishly effects of future changes inwardly the companyImprove the performance of a companyDetermine how exceed to implement a proposed strategyAlign departments and cropes during Merger and AcquisitionFINDINGS/briny BODYHISTORYThe McKinsey 7S framework was put forwardd after a consulting company, McKinsey and attach to, which has conducted applied look for in championship and industry (Pascale Athos, 1981 Peters Waterman, 1982). All of the authors worked as consultants at McKinsey and Company in the 1980s, they used the personate to analyse altogether over 70 broad organ isations. The McKinsey 7S Framework was created as a recognisable and easily remembered model in demarcation. The seven factors or variables, which the authors term levers, altogether begin with the letter S The McKinseys 7S framework is a value based counseling (VBM) model that describes how partner off slight coffin nail holistically and effectively organize a company and together, these factors determine the flair a company operates.THE SEVEN ELEMENTSThese seven elements or variables include structure, strategy, systems, skills, style, cater and shared values and are interdependent factors which as noted preferably are categorized as either hard or soft elements This is shown belowHARD ELEMENTS-StrategyStructureSystemsSOFT ELEMENTS-Shared establishSkillsStyleStaffHARD elements are easier to identify or bound and circumspection can directly influence them. These are IT systems and formal processes strategy statements and organization charts.SOFT elements can be more d ifficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements for the triumph of the organisation.The office the model is presented in Figure 1 below shows the interdependency of the elements and indicates how a change in one element affects all the other elements, as such this explains wherefore share values is placed in the middle.Figure 1 The McKinseys 7S exampleThe seven elements are briefly discussed belowSHARED VALUES Here, all members of the organization share some common guiding c erstpts or cerebrations around which the business is built. This may be to make profits or to pass excellence in their particular field. These values and common goals keep the put onees working towards a common destination as a coherent police squad and are important to keep the team spirit alive. It is also callight-emitting diode rank goals these are the core values of the company that are evidenced in th e corporate culture and the general work process.STRATEGY This is the plan of fill an organization prepared to maintain and make water matched advantage over the competition. It could also be defined as the plan of action make out by an organization to succeed its aims and objectives.Simply put, strategy is planning of organisational goals. It deals with essentially ternary questions1. Where is the organization presently?2. Where do the organization wants to be and3. How do they get there?As such, strategy is designed to understand the organization from the present position to the new position described by objectives, subject to constraints of the capabilities or the potential (Ansoff, 1965).STRUCTURE This is the way the organization is incorporated as well as who reports to whom. It is the way the organizational units re young to for each one other. Organizations are structured in different ways depending on their objectives and culture. The structure of an organization of ten dictates the way they operates and performs (Waterman et al., 1980). Businesses mystify been structured in hierarchy way with different departments and divisions, each responsible for a specific tax such as serviceman resources management, production, sales or foodstuffing.Many divisions of the management controlled the functions, with each answerable to the upper division of management. Although this is still the most astray used organizational structure, the recent trend is increasingly towards a vapid structure where the work is done in teams of specialists rather than fixed departments. The idea is to make the organization more flexible and devolve the spot by empowering the employees and eliminate the middle management layers (Boyle, 2007)SYSTEMS This is the daily activities, procedures, processes and routines that characterize how important work is to be done. These processes are normally and strictly followed and are designed to achieve the organizations effect iveness. For instance, a firm may have a particular way of recruiting.STYLE This refers to the cultural style of lureership adopted by management in achieving the organizations goals and objectives.STAFF This refers to the employees and their general capabilities to ensure that the organization is successful. The importance of serviceman resources has the central position in the strategy of the organization, away from the traditional model of capital and land. All jumper cable organizations such as Wal-Mart, IBM, etc put superior effort on recruiting the best staff, providing them with required training and mentoring support, and pushing their staff to limits in achieving excellence, and this forms the basis of these organizations strategy and competitiveHYPERLINK http//www.coursework4you.co.uk/essays-and-dissertations/general-business/competitive-advantage/competitiveadvantage.php HYPERLINK http//www.coursework4you.co.uk/essays-and-dissertations/general-business/competitive-adv antage/competitiveadvantage.phpadvantage over their competitors.SKILLS This is the distinctive capabilities of employees and or organization as a whole. It is the actual skills and competencies of the employees working for the firm. That is, the core competencies, main or important activities of the employees.USING THE MCKINSEYS 7S MODEL TO ANALYSE AN ORGANIZATIONThe McKinsey 7S model is one that can be applied to almost any organizational or team effectiveness issue. If something in spite of appearance your organization or team is not working, this may mean that there is inconsistency between some of the elements place by this classic model. Once these inconsistencies are revealed, you can work to lay out the internal elements to make sure they are all contributing to the shared goals and values.The process of analyzing where you are right promptly in terms of these elements is worthy in and of itself. But by taking this analysis to the next take aim and determining the ulti mate state for each of the factors, you can rightfully print your organization or team forward.The model covers almost all move of business and all major parts of the organization as such it is rattling important to gather as much information as possible about the organization from all sources available such as press release, organizational news and reports, etc. Primary research such as interviews is more effective.CORE COMPETENCIES AND CAPABILITIES IN WAL-MART perfume competencies are activities or processes that critically underpin the organizations competitive advantage. The primary aim for the firm is to receipt that competition between businesses is as much a race for competence as it is for the market power. midpoint competencies lead to the development of core products. Core products are not directly sold to end users but are used to build a blown-upr figure of end-user products. For example, motors are a core product that can be used in wide array of end products. The business units of the corporation each tap into the relatively few core products to develop a larger number of end user products based on the core product technology.The intersection of market opportunities with core competencies forms the basis for launching new businesses. Combining a set of core competencies in different ways and matching them to market opportunities, a corporation can launch different businesses. Without core competencies, a large corporation is just a collection of discrete businesses. Core competencies do as the glue that bonds the business units together into a coherent portfolio.Core competencies arise from the integration of multiple technologies and the coordination of diverse production skills. Some examples include Wal-Marts Logistics and Hondas engines.There are three useful tests for identifying a core competence. A core competence shouldProvide access to a wide multifariousness of markets This enables the creation of new products and services. For instance, ASDA has established a strong leadership in food retail industry. The core competence and capability that enable Wal-Mart to go into food and non food retailing products was a clear distinctive rat idea that focus on a well defined market segment.Contribute significantly to the end-product benefits The organization makes a significant contribution to pay off customer benefit. To identify core competences in a market, the question of why is a customer willing to pay more or less for a product/service than another needs to be addressed. unenviable for competitors to imitate There is need for core competence to be competitively unique this shows the importance of product differentiation. For example, Wal-Mart has been recognised as a leading food retailer in UK and had a strong position within the retailing industry.To break down understand how to develop core competencies, it is worthwhile to understand what they do not entailOutspending rivals on RDSharing be among business unitsIntegrating verticallyApplying this framework to Wal-Mart in order for the organization to be successful, has to base its business strategy on low cost leadership, they do not really differentiate themselves from competitors and provide no-frills self-service stock certificates that provides last-place harms eternally.Wal-Mart has built enough power and influence with providers that they can dictates their prices and change suppliers manufacturing process so as to obtain with difficulty more and more nest egg for the consumer. They provide severe customer service with low prices, in other words, Wal-Mart long suit is low prices and no one allows such a supplier and distribution meshing like them that allows such low prices.When analysing Wal-Mart business and the 7S framework, they employ all the three hard elements strategy, structure and systems, and due to their strength in these elements they have been so successful.As earlier mentioned, Wal-Mart overall stra tegy is to always provide lowest prices and they aim to provide a store that customers can shop under one roof and mention boththing they needed. This strategy of gismo shopping and lowest price has made Wal-Mart to be a business leader that it is. They also plan to continue to expand into markets not all the same penetrated by major manacles and some already saturated markets like California and New England. This strategy infiltrated the whole organization so that it encompasses all the other Ss and the other two Ss structure and systems support this strategyWal-Mart has a system in place that helps it achieve its low price strategy every day. The most profitable and largest of these systems is Information technology system and it has busy computers, networking and internet to reduce inventories and waste and also speed deliveries.Wal-Mart also uses good structure that works with the systems to empower the low price strategy. Wal-Mart has design an expeditious management str ucture that allows it to eliminate regional office, all its plan and operation is from the home of Bentonville, AR. Wal-Mart has designed an efficient management structure that allows it to eliminate the regional office. Everything for Wal-Mart is planned and operated in their home of Bentonville, AR. This structure alone has spelld Wal-Mart millions of dollars a year. When Wal-Mart places stores in strategic locations and sustains traffic using convenience and then combines the sales with its systems and structure, you get a highly efficient and well-oiled corporation that can egress costs to a bare-minimum which are then passed along to the consumer, hence fulfilling the strategy. If Wal-Mart continues to triumph these three Ss, it will continue to persist the retail market.THE CEOS ABILITY TO mend WALMARTS PRODUCTS AND CUSTOMERS PERCEPTION BY 2009.In Wal-Mart global, Michael Duke CEO since February 2008 and his team continued to drive exceptional sales growth around the wo rld, totalling $90.6billion at the end of the year. He said that Wal-Mart is well positioned for todays economy and future changing world with exceptionally strong management team and ability to execute the companys strategy, perform every day and deliver results, this success is attributed to the hard work of many lot and the formal CEO, Lee Scott (2000-2008).Wal-Mart has a role to in terms of pass more efficient services to employers, helping customers save money by dint of with(predicate) $4 prescription program, opening health clinics in our stores and engaging a broader public policy debate.Wal-Mart as a global company is better positioned today than ever before on its mission. By 2009, the Lee believes that customers all over in the world will continue to depend on Wal-Mart to save them money so they can live better, in respective of their age. The companys price leadership position helps those willing to improve their lives through hard work move up the ladder.The compan y owe every customer their very best lower prices, higher quality goods and a better store experience. Sustainability as a permanent culture in Wal-Mart has help t to remove waste, lower costs and provide savings to their customers.The CEO also ensure that Wal-Mart is committed to building more socially and environmentally responsible supply chain of mountains which will make a difference in responsible sourcing that no other retailer can make.THE APPROACH TO strategic DEVELOPMENT AT WAL-MART SINCE 2003.Wal-Mart made strategic attempts in its formulation to dominate the retail market with its present growth by expansion in the United State and internationally through creating widespread name acquaintance and customer satisfaction in relation to brand name and ramify into new sectors of retailing.It is observed that Wal-Mart strives on three generic strategies namely, focus strategy, distinction strategy and overall cost leadership. Wal-Mart has firm infrastructure, well equipped human resources with management professionals as well as technologically too. The company operates on low price strategy which operated as everyday low prices (EDLP) and this helps to build customers trust. this strategy involves Wal-Mart purchase goods at lower prices and sell the goods t customers at much lower prices, the price is cut as low as possible, this brought about an increase in the profit by increasing the number of sales. This causes increased market competition and makes Wal-Mart compete with all its competitors till it dominates the market.Wal-Mart is expanding gravely and rapidly which is also its strategic goal. Wal-Mart employs over 1.3 associates, owns over 4000 stores out of which 3000 are in US and serves around 100 million customers weekly.Wal-Mart has acquired many international stores and merged with some super stores like ASDA in UK.Wal-Mart far flung network of retail outlets has ensured that Wal-Mart interacts with and has impact on virtually every loca lity within US. The expanded strategy has led the hunger of Wal-Mart to many European Countries. It is learnt that three countries with no Wal-Mart stores became part of corporations international presence wherein the domestic retail chains were taken over by Wal-Mart including 122 Woolco stores in Canada, 21 Wertkauf stores in Germany and 229 ASDA units in United Kingdom. The takeover strategy by Wal-Mart keeps the company at mind when entering into the new market and the number of competitors is also minimized. The strategies have helped the Wal-Mart to go forward in number one position in international countries qualification it the largest retailer in the world.It is seen that Wal-Mart has significantly the Porters five force model where through proper strategic planning and strategic implementation has led to removal of barrier entry, rivalry from competitors and pricing norms.Wal-Mart with its low cost and ever expanding strategy has made a dramatic impact since 1962 when Sam Walton first started his business. With this strategy, Wal-Mart has now over 4000 stores and outlets in US and other countries through acquisition and mergers. administrator SUMMARYWhen you think of the discount retail industry, you think of the bigger name Wal-Mart. Wal-Mart has built the industry into leader in a very competitive market, and has continue to set the bar for every company. But as of late Wal-Marts sales growth rate has been slipping, which is causing a major difficulty for them. For the past few years Wal-Mart has grown accustom to double physique sales growth rates, but recently they have been unable to match their previous success. Now Wal-Mart is faced with the challenge of regaining the success that they once had.To recapture these high growth rates it is important to understand what lead Wal-Mart to these high growth rates in the first place. When analyzing Wal-Mart externally you find that its 5 forces tend to have a positive effect on the company. The c ompany has high barriers of entry, a moderate threat of rivalry with scar and incredible power over all its suppliers because Wal-Mart purchases so many products, the suppliers have little negotiating powers, and finally Wal-Mart technically has a great amount of power over its buyers because of its product variety and low prices.When analyzing Wal-Mart internally you discover may things that lead to their success. Probably the number one thing that led to success is their world class supply chain. Wal-Marts supply chain is remarkable and really allows them to cut cost by eliminating unneeded steps. For instance their supply chain is a high tech that can notify Wal-Marts suppliers directly (cutting out worker intervention) when inventory is low for certain products. Another internal strength that has lead to Wal-Marts success is its ability to focus on reducing costs to ensure everyday low prices. Wal-Mart has never drifted away from this motto which has led to Wal-Marts extensive self size and amount of products offered.