Seven - Eleven Japan

Group 8Oltean Patricia

Opoku-Darkwa Karen

Panova Svitlana

Siddharth Choudhary

Shen I-Pai

Background & HistoryType: Retail (Convenience Stores)

1927: Founded in Dallas , Texas as Southland Ice

Company

1946: Renamed as 7-Eleven

1963: 24-hours stores established.

1974: Japan’s first 7-Eleven store in Tokyo

2005: Became subsidiary to Japanese owned

company Seven & I Holdings Co.

First Southland Ice Company store 1927

First 7-11 store in Japan, Tokyo

One of the 7-11 in Japan today

7-11 Around the World

Far EastJapan 12,771China 1,696Indonesia 8Malaysia 1,142Philippines 493Singapore 512South Korea 2,449Taiwan 4,722Thailand 5,511

Total: 29304

Rest of the WorldAustralia 406Canada 458Denmark 121

Mexico 1197Norway 176Sweden 191

U.S.A 6579

Total: 9128

(as of June 30, 2010)

Convenience

Oxford Dictionary

Sample layout of a typical Japanese convenience store

Definition

State of being able to proceed

with something without difficulty

Quality of being useful, easy or

suitable for someone

A thing that contributes to an easy

and effortless way of life

In terms of Convenience Store Retailer

Everything in One Place

7-Eleven In-Store Services Copy/fax/scan

Digital Prints

Ticket Purchase

(cinema/sports/exhibition/concert/holiday/theatre etc..)

Prepaid Service (Game/Music/Mobile

top-up/International Pre-paid cards etc..)

Prepaid for Air Tickets

Bicycle Insurance

Pay for Yahoo Auctions

Pay for Bills

Postal Service

7 Eleven Bank

Delivery

4 Rules to Increase Consumer Loyalty

Product AssortmentProducts are displayed to

entice the customers

FreshnessConstant fresh produce,

supported by RIS

Friendly Customer ServiceGreeting every customer and

serving with a smile

CleanlinessSo that customer can shop in

comfort, quickly and easily

Bargaining Power of Buyers

Customers outside of the region?

Customers with ethical relationship with oriental

way of consuming

Substitute of Products and Services Internet

TV Sales and Advertising

Porter’s 5 Competitive ForcesThreat of New Entrants

Local Franchise Established Retailers from the “Convenience” Shopping Market

Super Markets (Circle K)

Bargaining Power of Suppliers

Cheaper Manufacturers Local/Foreign Produce

Major competitors

Other competitors

Main concepts: Customer satisfaction & Innovation

The Organisation of the Franchise Grant licenses to franchisees to use its name and trademark

Provide management know-how and management information to

franchisees

Employs ‘operational field counsellors’ & specialists to help franchisees

Strategy - Market Dominance 40-60 stores in small geographical area

Increase brand awareness

Gain competitive advantage

High distribution efficiency

Decrease in supply costs

Strategy of 7-Eleven

Two 7-11 stores at the same intersection

Distribution System I Priority of manufactures’

convenience Products are sold only to the

wholesales belonging to the group Delivery vehicle carries the

products of only one supplier at a time

Mixing goods from different suppliers

Small unit ordering and delivery system

Avoiding the overstocking Easier to follow customers’

changing demands

Source: Kunitomo: 1997

Distribution System II ‘Combined delivery system’

Utilizes temperature-controlled vehicle to carry different items

Loading capacity of each vehicle has been developed

Products are divided into four different temperature zones:

- frozen foods - chilled foods - hot foods - processed foods

The frequency of the deliveries is determined by their temperature

Source: Seven & I Holding Co. Ltd

Total Merchandising

Source: Kunitomo 1997

Communication within the company Weekly meetings

Data collected in store regularly sent to

headquarter

Data studied & analysed company

strategy developed

Role of individual member of staff is

central to the business

Company Synergy

7-Eleven Japan continues moving forward in its role as a distribution group that can respond to customer expectations through continuous innovation and group synergies

Information Technology Partnership with NEC and Microsoft allowed the introduction of a tailor made

information system

The system brought forward a series of innovation and eliminated certain

inefficiencies

i.Orders to flow quicker, hence enhancing the efficiency of the supply chain

ii.Use sales data and software to improve quality control, pricing, product development

iii.Predict daily trends

iv.Monitor the consumers’ need

Factors Contributing to the Success of 7-11

One of the NEC’s Point of sale system used in 7-11

Factors Contributing to the Success of 7-11Innovations Introduction of New Products, Supply Chain Management and Sales Process

Chilled Vegetable Juice

Product: Ball-shaped frozen

vegetable juice- a fusion of vegetable

juice by Kagome and ball shaped ice-

cream by Ezaki Glico

Supply Chain: A retailer collaborating

with two manufacturing companies each

with different capabilities

Oven Fresh Bread

Supply Chain: Delivery 3 times a

day without increasing costs through

collaboration between a manufacturer

and a retailer

Sales Process: Use convenience

store as a new channel for an

exclusive fresh oven bread

Examples

Ito En Ltd’s “Ooi-ocha”(Big-Tea)

Product: Various and unique

flavours of tea in plastic bottle

Sales Process: Offering a dynamic

line-up of variations consisting of a

staple product and its variations with

planned short life cycles that

collectively gives a refreshing

impression on a brand and shelf.

Nissin Food Products "Goo-Ta"

Product: Instant cup noodles with

many ingredients

Sales Process: Dynamic  line-up of

variations, introducing one new

variation a month to the market and

maintaining 5 to 6 variations of the

brand at a time (unlike "Ooi-ocha" it

does not have a staple product).

More Examples of Innovations

Customer Profile of 7 Eleven

Strategies for 7-11 to Build More ‘Life Infrastructure’Homage Service to Senior Citizens

Why?

Due to the increase in aging population

How?

Personal home visit service to understand the needs of individuals

Take orders and deliver the goods

Care Women or Hire Men

Why?

Due to the ‘Retired Husband Syndrome’ in women and

the ‘Take Me With You Horror’ in men

How?

Provide special ladies’ discount hours service

Provide jobs for retired/jobless men

Strategies for 7-11 to Build More ‘Life Infrastructure’

Save Bento Culture

Why?

Due to lower nutrition values in children’s lunch meal box

More instant meals for children due to increase working

women

How?

Reinvent ready-made nutritious Bento for school children

Show Ticket Take Discount

Why?

Reduce road traffic

Reduce air pollution

How?

Get discounts and/or free home delivery service when showed proof of public

transport use on that day itself

Strategies for 7-11 to Build More ‘Life Infrastructure’

Remind Japanese their Invention Macrobiotic Food (known as ‘Anti-Cancer Food’ ) used to be very

popular in Japan

Therefore, 7-11 could :

Re-promote and provide more of this kind of food in stores

Have more macrobiotic food properties in other food products at

more affordable prices

No Stop Shopping

Provide more convenience for customers

by

Order & Pick up service

Anytime order and pick-up service upto

customer’s convenience

Macrobiotic food beans

Macrobiotic food seedsReady-made macrobiotic food

Conclusion

7-11 prides themselves by delivering transaction convenient element

The company adapt and adopt strategies to customise tailor to fit organisations needs

7-11 was able to modernise the convenience store by using a tailor made information

system, continuous innovations and always placing  high priority on the community and

its culture

7-11 continues moving forward in its role as a distribution group that can respond to

customer expectation through continuous innovation and group synergy

Information and Emotional Appeals: Using strategy known as “Demonstration”

information based messages.

http:// www.youtube.com/watch?v=zIkSAT5ykRw&feature=related

Thank You ! Questions ?