Alignment and the 7 S's

I recently did an internship with an accounting firm. My experience was great, and I accepted a full-time offer. The company is doing well and employees are overall very satisfied. I mention this because I do not intend to speak ill of the company with this post. This assignment requires me to identify a misalignment in the company, and I did identify one on my internship. The company preaches work-life balance, but there is no time and no way that this can be accomplished during busy season. The company makes up for it by providing additional benefits during the slower times of the year, but there is a misalignment between the work-life balance due to the nature and requirements of the business.

This is extremely difficult for married employees because a large portion of the employees are young and single. They are able to work a lot of hours and don't have a wife/kids at home. Because of the different types of employees, some employees are not understanding of married employees that would like to get home to their families. They like to take longer lunches, come in late, and head home late at night. As mentioned earlier, this can be very difficult at times for other employees and causes some professionals to leave.

The Value Curve

After talking about the Value Curve in class and how Cirque de Soleil was able to create a new market and add more value to potential customers, I tried to think of other companies that had been able to do the same thing. The first thought that came to my mind was the movie rental industry. Blockbuster used to be a powerhouse in the movie rental industry. They provided their customers the opportunity to watch a movie without purchasing it and had stores in convenient locations.

Blockbuster enjoyed this dominance until Netflix found a way to create a new market and still much of Blockbuster's business. Netflix took the convenience and luxury of Blockbuster and increased it. Customers no longer had to leave their homes to rent a movie. They could request it online and it would come in the mail. Netflix added even more value to customers when it created the streaming option.

We are now seeing another shift and the creation of a market where videos are no longer shipped; rather, they are simply streamed. The inability of Netflix to provide customers with a wide variety of videos to stream has allowed other companies such as Hulu or Amazon to sneak into the market. It is only a matter of time before another company finds a way to create a new market or find ways to add value to a customer's experience.

The Hedgehog Concept

After learning about the Hedgehog Concept, I decided to look at very successful companies, using the concept as a guide. One of the companies that best fit the concept is Walmart. From my knowledge of Walmart, its overall Hedgehog Concept fit is as follows:

At what can we be the best in the world? Walmart is the best at providing a wide variety of products at a much lower cost than competitors. Walmart has focused on this so much that they will match prices from other stores, even if that price is a result of a sale.

What is the economic denominator that best drives our economic engine? The economic denominator, in my opinion, is the cost/product. Walmart has so much buyer power that it can negotiate lower prices with its suppliers.

What are our core people deeply passionate about? Once again, I would say the passion of Walmart is providing products at a low price. Executives have made decisions that allow Walmart to operate at a much lower cost than many of its competitors. For example, Walmart uses and requires suppliers to use technology such as RFID tags to cut down its costs of receiving and storing inventory. By using RFID tags, Walmart is able to cut down on the number of employees required to receive inventory and maintain data regarding the overall balance of inventory.

Internet and Search Engine Industry - Porter's Five Forces

I recently read an article about Yahoo!'s strategy in moving forward after firing its CEO. (See article @ http://www.ft.com/cms/s/2/6ab76552-d96f-11e0-b52f-00144feabdc0.html?ftcamp=rss#axzz1XJDeqY8v). The article discusses a number of Yahoo!'s potential strategies to improve the future outlook of the company. It reminded me of our class discussion on Porter's Five Forces, and I thought it would be very interesting to analyze the internet industry, and even more specifically, the search engine industry. My analysis is contained below:

Barriers to entry - Although my knowledge in regards to search engines may be limited, I know that one of the most critical components to being successful is being known. Microsoft has tried for years to advertise its search engine "Bing" but has been unable to successfully pull internet users from search engines such as Google or Yahoo!. Because of this, the barrier to entry is a positive for existing companies as it is difficult for new entrants to gain market share. In addition, larger search engines such as Yahoo! and Google provide additional services such as email accounts (Google even created its own internet browser) which brings additional traffic to the search engine's website.

Supplier power - This category is another positive of the industry, because a search engine can purchase its computer/networking equipment from many suppliers. In addition, developers are increasing in popularity, and this task can even be outsourced.

Buyer power - Search engines typically provide their services for free, so the buyer power exists only to the extent that additional traffic means advertisers pay the search engine more to advertise.

Substitutes - There aren't really any great substitutes for search engines. Libraries and encyclopedias are about as close as you can get. The article also mentioned that websites such as Facebook are now competing with search engines through online ads. Overall, however, this is a very positive area for this industry.

Rivalry - The competition in this industry is pretty fierce. Yahoo! and Google must constantly work to provide additional products and incentives to internet users to gain market share. This is not one of the strengths of the industry.

Overall, this seems to be a very good industry to be in. It is difficult to gain entry into the industry, but, if successful, one could start a very profitable company by creating a search engine.