The Seven S Model: Business Analysis Model

Typically, the 7S model is used in large corporations. Often, those companies have a hard time getting a handle on their situation and their potential because they are fragmented across continents, business units, confusing conglomerates, or constant acquisition and shuffling. The 7S model gives the multifaceted company a single set of metrics with which to analyze.

I believe that 7S is just as appropriate (on a smaller scale, of course) for the smaller business. But before we look at how it's helpful, let's consider what the 7S's are.

The 7S's were created by Robert H. Waterman, Julien R. Phillips, and Tom Peters (the most well-known of the group because of his book In Search of Excellence).
They are a group of interrelated categories which make up an organization. Like rowers in a boat, when they are all aligned, a business will likely succeed, prosper, innovate, and move in the direction it wants to move. When these factors are not aligned the business can fail, remain stagnant, reach maturity or decline quickly, or flounder about.

The Seven S's

1. Structure: This is more than just the stated hierarchy of the organization. This is the "in practice" hierarchy, too. Is a business focused on the customer? Is it segmented by function? Is it segmented by geography? Is it top heavy with a lot of decision-making executives?
2. Systems: This is the process through which the company gathers information and makes decisions. If it's effective, a company can react quickly and appropriately to changes in the marketplace. If a company's systems are not adequate, the company stands the risk of being ponderous.
3. Skills: This is the collective skill set of the organization. If a company determines to hire only people who can speak two or more languages, they will quickly fill their ranks with skilled people who allow them to communicate to other people more effectively. Some companies in the early growth stages can react to a need by hiring too many people in one skill category and run the risk down the road of having a variety of absent skills. There is no perfect mix, this is a matter of constantly balancing and rebalancing based on need.
4. Style: This category is about the culture of the company. Is it aggressive? Is it conservative? Is it innovative? Is everyone happy? Does the company feel bloated and unwieldy? Each company has its own style and that style is set by the leadership and supported (or changed) by the mix of staff hired.
5. Staff: This category, obviously, deals with the people in the organization. It involves not only their skills (mentioned in another S) but also whether or not there are enough (or too many) staff members to do the job as well as the personal and professional goals that each person has.
6. Superordinate goals (which later was appropriately renamed Shared Values):This category talks about the overarching purpose in the organization more specifically, it deals with the real or practiced values and compares them to the stated values. A company, for example, may claim to be customer-centered but in reality it could reward staff for high volumes of sales, encouraging staff to ignore the customer and focus on making their numbers.
7. Strategy: Strategy deals with tomorrow- what is the company planning on achieving in the future and what are they doing today to prepare for those goals?

How to perform a SWOT analysis

The SWOT analysis is a valuable step in your situational analysis. Assessing your firm’s strengths, weaknesses, market opportunities, and threats through a SWOT analysis is a very simple process that can offer powerful insight into the potential and critical issues affecting a venture.

The SWOT analysis begins by conducting an inventory of internal strengths and weaknesses in your organization. You will then note the external opportunities and threats that may affect the organization, based on your market and the overall environment. Don’t be concerned about elaborating on these topics at this stage; bullet points may be the best way to begin. Capture the factors you believe are relevant in each of the four areas. You will want to review what you have noted here as you work through your marketing plan. The primary purpose of the SWOT analysis is to identify and assign each significant factor, positive and negative, to one of the four categories, allowing you to take an objective look at your business. The SWOT analysis will be a useful tool in developing and confirming your goals and your marketing strategy.

Some experts suggest that you first consider outlining the external opportunities and threats before the strengths and weaknesses. Marketing Plan Pro will allow you to complete your SWOT analysis in whatever order works best for you. In either situation, you will want to review all four areas in detail.

Strengths
Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control. What do you do well? What resources do you have? What advantages do you have over your competition?

You may want to evaluate your strengths by area, such as marketing, finance, manufacturing, and organizational structure. Strengths include the positive attributes of the people involved in the business, including their knowledge, backgrounds, education, credentials, contacts, reputations, or the skills they bring. Strengths also include tangible assets such as available capital, equipment, credit, established customers, existing channels of distribution, copyrighted materials, patents, information and processing systems, and other valuable resources within the business.

Strengths capture the positive aspects internal to your business that add value or offer you a competitive advantage. This is your opportunity to remind yourself of the value existing within your business.

Weaknesses

Note the weaknesses within your business. Weaknesses are factors that are within your control that detract from your ability to obtain or maintain a competitive edge. Which areas might you improve?

Weaknesses might include lack of expertise, limited resources, lack of access to skills or technology, inferior service offerings, or the poor location of your business. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your marketing objectives.

Weaknesses capture the negative aspects internal to your business that detract from the value you offer, or place you at a competitive disadvantage. These are areas you need to enhance in order to compete with your best competitor. The more accurately you identify your weaknesses, the more valuable the SWOT will be for your assessment.

Opportunities

Opportunities assess the external attractive factors that represent the reason for your business to exist and prosper. These are external to your business. What opportunities exist in your market, or in the environment, from which you hope to benefit?

These opportunities reflect the potential you can realize through implementing your marketing strategies. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your business, or the ability to offer greater value that will create a demand for your services. If it is relevant, place time frames around the opportunities. Does it represent an ongoing opportunity, or is it a window of opportunity? How critical is your timing?

Opportunities are external to your business. If you have identified “opportunities” that are internal to the organization and within your control, you will want to classify them as strengths.

Threats

What factors are potential threats to your business? Threats include factors beyond your control that could place your marketing strategy, or the business itself, at risk. These are also external – you have no control over them, but you may benefit by having contingency plans to address them if they should occur.

A threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits. Competition – existing or potential – is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, devastating media or press coverage, a shift in consumer behavior that reduces your sales, or the introduction of a “leap-frog” technology that may make your products, equipment, or services obsolete. What situations might threaten your marketing efforts? Get your worst fears on the table. Part of this list may be speculative in nature, and still add value to your SWOT analysis.

It may be valuable to classify your threats according to their “seriousness” and “probability of occurrence.”
The better you are at identifying potential threats, the more likely you can position yourself to proactively plan for and respond to them. You will be looking back at these threats when you consider your contingency plans.