Introduction
The Abaya business has been chosen and developed as it is an important part of Emirati tradition and culture. The staff making Abayas has 15 years of experience and their experience helps in developing high quality abayas. The products are customized according to customer needs and the price is kept low, in order to compete with bigger brands making abayas. The company has a strong customer base, but suffers due to significantly higher rent.
Employees by motivated through sales bonuses, but it has been tough to cover the basic costs of running the business. The business wants to exploit business expansion opportunities, but choices have been limited due to unauthorized abaya makers using social media to reach customers and changing customer tastes. This paper will analyze the internal environment of the abaya business on the basis of the McKinsey 7S model.
McKinsey 7s Model
The 7S model is used in several situations where alignment of perspective is effective. For instance, it can help in improving company performance of a company, examining the likely impact of any future change to the company, aligning the business processes. The McKinsey 7S framework describes the way an organization can be effectively and holistically manage their business. In combination the seven factors determine the best way to manage business operations. The 7S framework can be used to evaluate the current condition of the abaya business. In addition, the 7S framework can help in understanding how the company can exploit the opportunities that are available to them. The internal evaluation of the abaya business discloses its 7S.
Shared Values
The abaya business stands for the Emirati beliefs and values. The business itself is manufacturing and retail of abayas, which are culturally bound in the Islamic faith. The business is designed around the Islamic values and the expected behavior of females in the the Arabic society. Since, women are expected to cover themselves by wearing abayas in public; the business is exploiting an opportunity that has perpetual growth opportunities in the country. The core values of the company and clearly resonate the values of the country and the people it is servicing. Therefore, the company and its employees have shared values in terms of the product they are preparing and the customer need they are fulfilling through their abayas.
Strategy
The resources of the abaya business are limited and the cost of renting has been a major problem. The rent is comparatively higher and takes a major proportion of the income made by the shop. In addition, the goals of reaching the profit within six months have not been achieved due to the high cost and competition in the market. The competition from larger brands and unauthorized sellers reduces the number of buyers in the market. The costs and competition are playing an important role in changing the business strategy. The business environment has forced into making tough purchasing choices and material has been bought in bulk to reduce costs.
Structure
The organization uses functional (top-down) structure, where the owner handles the sales team and hires outside help for designing the abayas. Each department is related to each other as the sales team and the designer have specific roles where their contributions help in making sure the company is able to produce and sell the abayas. The structure is also useful as each department is able to relate with each other and form an effective operation. The structure also helps in reducing the cost of final material produced as they do not have a full time designer and it reduces the cost of every abaya.
Systems
The performance appraisal system helps in deciding the bonuses. Every member of the sales team gets their appraisal on the basis of number of sales generated over a period of time. The shop rent is one of the most essential parts of the financing the business. The current trouble of not struggling to make profits has forced the owner to make a bulk purchase of materials from Dubai. There is no clear information system in place, but the every week the owner meets the sales team to enquire about the current performance of the business and evaluate the performance of the employees.
Staff
The staff, mostly includes the sales team, which takes and processes orders. The staff comprises of mostly the experienced sales staff, abaya makers that customize abaya designs and contracted designer. They have more than 15 years of work experience in the abaya industry and understand the needs of managing the abaya customers. Employees are motivated through sales bonuses and increasing the number of sales means the employees make more money. Employees are trained through weekly meetings with the owner that helps in understanding the current number of sales they have delivered and the number of abayas they have completed in the week.
The leader utilizes a participative leadership style by continuously remaining involved in the business operation. The leader manages the organization by continuously maintaining communication with the abaya makers and sales team to keep track of the sales. Also, major business decision such as negotiating the rent, buying the material and hiring a contractor has been part of the leader’s duties in the organization. By remaining actively involved in the business operation, the leader is well aware of the current position of the business and the possible changes that can help improving the position of the business and exploiting the opportunities in the market.
Skills
The abaya makers have a district capability of making abayas for more than 15 years. Their experience comes in handy when taking care of customizations in the final product. The product quality of the abaya is maintained at a high level, but the costs are kept low due to the competition. The experience of abaya makers, high quality and low cost of of the abayas, and customized product works as the core competency of the business. The contracted designer helps in making designs and provides the business with an opportunity to maximize the potential available in a highly saturated market.
Conclusion
The current position of the abaya business can be evaluated on the basis of McKinsey’s 7S.
The strategy of the abaya business is to take advantage of the experienced abaya makers and sell high quality abayas at low rates. The organization structure is functional in nature as organization directly manages the sales team and abaya makers, as departments are made for specific purposes. The system of appraisals is to provide bonuses for the number of sales and rent is one of the major aspects of financing the business. The company has shared values as the product they are selling resonates with the home country’s culture. Employees are highly skilled in making abayas and have 15 years of experience in the industry. The leadership style is participative as leader is actively involved in the business operation. The staff consists of experienced abaya makers, sales team, the owner and the contracted designer.
Work Cited
McKinsey & Company. Enduring Ideas: The 7-S Framework. McKinsey & Company. mckinsey.com. March 2008. Web. 5 May 2016.
