7 Eleven Case Study
Introduction
Context
7-Eleven has been founded in the late 20s in Dallas Texas. After years of substantial growth, a Japanese company gained control in 1991. Over the years it has developed an extensive franchise network. This makes 7-Eleven the world’s largest franchisor, currently operating over 50,000 outlets. ("7-11 around the," 2013)
There is an important difference between the strategies of 7-Eleven Japan and 7-Eleven USA. Due to the high-population density in Japan, 7-Eleven Japan makes use of the market-dominance strategy. This implies that many small stores are opened in a new area supported by a distribution center. Trucks could be filled at the distribution center and sent to multiple shops on a route, which is the main success of the logistical system of 7-Eleven. This clustering thus allowed for an efficient distribution system, but also improved brand awareness, advertising effectiveness. Moreover, the high-density market presence pushed away any competitors from the area.
The same strategy was not effective for the USA. Because of the lower population density, the inhabitants preferred bigger stores in which they can purchase all their daily needs at once. In the US, stores are supplied using direct store delivery by producers and by wholesalers (Dullaert, W.E.H. & Feldberg, J. F. M., 2013).
The different cultural views of convenience stores in Japan and the USA play an important role. Most US customers consider the 7-Eleven stores as regular stores during gas-refill or for last-minute visits. In comparison, the Japan customers see the conveniences stores as what they call konbini ("Konbini: Japan’s all-in-one," 2009). It is considered as an important way of life and the stores have a positive image among the customers. The Japanese 7-Eleven business model tries to maintain this positive image and loyalty by gathering data about their customers and use this data to create knowledge. In this way 7-Eleven becomes an innovative business with
Context
7-Eleven has been founded in the late 20s in Dallas Texas. After years of substantial growth, a Japanese company gained control in 1991. Over the years it has developed an extensive franchise network. This makes 7-Eleven the world’s largest franchisor, currently operating over 50,000 outlets. ("7-11 around the," 2013)
There is an important difference between the strategies of 7-Eleven Japan and 7-Eleven USA. Due to the high-population density in Japan, 7-Eleven Japan makes use of the market-dominance strategy. This implies that many small stores are opened in a new area supported by a distribution center. Trucks could be filled at the distribution center and sent to multiple shops on a route, which is the main success of the logistical system of 7-Eleven. This clustering thus allowed for an efficient distribution system, but also improved brand awareness, advertising effectiveness. Moreover, the high-density market presence pushed away any competitors from the area.
The same strategy was not effective for the USA. Because of the lower population density, the inhabitants preferred bigger stores in which they can purchase all their daily needs at once. In the US, stores are supplied using direct store delivery by producers and by wholesalers (Dullaert, W.E.H. & Feldberg, J. F. M., 2013).
The different cultural views of convenience stores in Japan and the USA play an important role. Most US customers consider the 7-Eleven stores as regular stores during gas-refill or for last-minute visits. In comparison, the Japan customers see the conveniences stores as what they call konbini ("Konbini: Japan’s all-in-one," 2009). It is considered as an important way of life and the stores have a positive image among the customers. The Japanese 7-Eleven business model tries to maintain this positive image and loyalty by gathering data about their customers and use this data to create knowledge. In this way 7-Eleven becomes an innovative business with
References: Asur, S., & Huberman, B. A. (2010). Web intelligence and intelligent agent technology. 1, 492-499. doi: 10.1109/WI-IAT.2010.63 Dullaert, W. E. H., & Feldberg, J. F. M. (2013). Logistics and Information Systems. 3rd ed. Amsterdam: Pearson Education Limited. 62-68. Google Trends. (n.d.). Retrieved April 28, 2013, from http://www.google.com/trends/ Harrison, T. P., Lee, H. L., & Neale, J. J. (2005). The practice of supply chain management where theory and application converge. Springer. Konbini: Japan’s all-in-one convenience store (2009).Japan Consumer Marketing Research Institute, Retrieved from http://www.jmr-marketing.com/user/casecontent.php?id=42 Lazaris, C., Mpismpiki, E., & Moraiti, M. (2007). Information Systems Management Case Studies. Athens University of Economics and Business. Retrieved from http://e-learning.dmst.aueb.gr/mis/Cases/7-Eleven/index.htm Lica, L., & Tuta, M. (2011). Predicting product performance with social media. Informatica Economică, 15(2), 46-56. Retrieved from http://core.kmi.open.ac.uk/display/989051 Woodcock, N., Green, A., & Starkey, M. (2011). Social CRM as a business strategy. Journal of Database Marketing & Customer Strategy Management, 18, 50-64. doi: 10.1057/dbm.2011.7 7-11 around the world. (2013, March 31). Retrieved from http://www.sej.co.jp/company/en/g_stores.htm