The organization that I choose for this assignment is 7- Eleven. 7 Eleven Inc. is a global organization that belongs to the retail industry. It is a Japanese-owned American organization and has its headquarter in Dallas, Texas (U.S.A). It was founded by Joe C. Thompson Jr. in 1927. It has more than 66,579 stores in 17 countries. It is one of the popular and leading retail stores in Canada. It has more than 600 branches in Canada.
The various products offered by 7- Eleven include food items, Beverages, Magazines, Soaps/Detergents, Game, and Software etc. Apart from that services that are offered by 7 eleven include payment of bills, internet shopping, oil and gas services, automobile parts and services, ATM facility, Tickets sales, Photocopying, video rental services and many more.
The core values of 7- Eleven define their spirit how they conduct the business with their stakeholders. The other different values that 7-Eleven include is acting with fairness, integrity, sensitivity and embracing the highest standards. The other main feature of 7- Eleven is it provides their products and services by staying open for long hours.
There are a variety of customers that 7 Eleven serves every day. Each customer values a lot to this organization. The various factors that lead to customer retention include the cost and quality of the product, varieties of services provided their values towards the society, their marketing strategies. The variety of customer that 7-Eleven serves on a daily basis are classified into various categories
Age: They provide a variety of products and services according to age groups. Like Slurpies and games that lure the children, variety of magazines and other services mentioned in the above section that attracts the adults.
Location: The meal delivery services provided in Japan for the aging population, the products, and services according to the area in which the convenience store (7-Eleven) is located i.e. Urban/Rural.
Ethnicity: As 7-Eleven has its location in more than 17 countries so it provides their services and products considering the ethnicity in which their store is located. 7-Eleven values the culture, traditions and various rituals that are followed in a particular country for its customer retention.
Income: 7- Eleven provides daily based convenience product that is not very much expensive and are within the range of a common man that belongs to a low class.
The perfect customers of 7-Eleven eleven are those customers that require daily based products and services. 7-Eleven provides a plethora of products and services under one roof. So, most of the people prefer the nearby 7-Eleven convenience stores to fulfill their daily based needs.
The Mission that 7- Eleven have followed is based on the 3 Cs: Close, Convenient, and Connect customers globally and fulfill their demands at any time. This mission statement guides 7-Eleven in the every decision-making process. The varieties of customers that are classified above are targeted by this organization.
The corporate culture of the 7-Eleven is very diverse that not only satisfies the demands of their customers but also the needs of their employees that works for this organization. The flexible working schedule, perfect organization culture (Values, Beliefs, Attitudes, Perceptions of each employee towards their coworkers), pay scale, Compensations/benefits that help in employee retention and better dealing with customers.
Core Values that 7 Eleven have is the way and criteria they follow of dealing with their stakeholders. Stakeholders of this organization are Customers, Community, Suppliers, Employees, Investors, Shareholders Government and Administrative staff (Managers/Owners). The fairness, integrity, sympathy, openness, transparency, and respect shown by 7-Eleven as an organization towards their stakeholders defines its core values.
The Vision of the 7-Eleven is to be the best retailer of convenience. The Vision statement offers the direction, shapes strategy to this organization. It adds human values, inspires employees and gives them a sense of purpose. It also helps to predict the future as well to minimize any kind of uncertainty.
The 7- Eleven is one of the convenient stores in the United States.
This company is using growth corporate level strategy. The 7-Eleven has over 49,500 stores in 16 countries across the world. However, in 1963 it had only 1,000 stores across the country.
After the few years 7- Eleven is developing their stores in every country such as after 1969, they set up their business in Canada so, I think 7- Eleven is adapting to the local market, so increasing the number of stores all over the world that means growing their business day by day.
In Australia, their 7- Eleven stores are offering a new mobile application that are providing customers to choose the best deal on gas.
“ With the launch of the 7- Eleven Australia fuel app the chain has taken a strategic approach on how convenience stores use mobility to overcome the impulse factor building utility into their mobile offering to differentiate themselves against other convenience stories,” said Scott Bradley founder and CEO of VMob.
I think this business strategy is effective because 7- Eleven is gaining popularity and they know about their customer’s experience and also make them competitive in the world. Moreover, this differentiation strategy is very helpful for the company to make them different from others because this increases their customer rate.
Moreover, 7-Eleven is providing fresh food to their customers that leads to increase their reputation.
“There’s been a major focus on the push for fresh foods” Kelly Buckley, vice president of fresh food innovation for 7- Eleven.
As from research, in my opinion, as 7- Eleven is using focus strategy that is very helpful for them because they offering fresh products that make them competitor and that increasing their value of a customer.
Strengths:-
Weakness:-
Opportunities for 7- Eleven:-
Threats:-
The 3 C’s of “Close,” “Convenient” and “Connect” forms the core value for this organization (Mourdoukoutas, 2018). In the past, they made a fortune by weaving around a distribution network and retail facilities based on the recommendations of these three guiding pillars. In the last five year, the business environment has changed drastically across the world. The definition of the guiding pillars “Close”, “Convenient” and “Connect” is changing in the new environment. The PESTAL analysis or the macro environmental analysis of the operational areas gives us the idea that the retail sector in most of the countries is facing the heat of the dot-com boom. Some well established retail chains have successfully converted their operations in this new environment whereas many companies are still struggling with it (Strauss, 2018).
According to the studies done by many independent agencies across the world, the dot-com boom or the online boom is catching up. Government sector across the world are promoting this dot.com boom because of many reasons. First, the dot-com boom eases out their job of collecting taxes on different levels and second the customers are very happy about it. We cannot say that the political environment connected to the retail industry is hostile (Staff Reporter, 2018). However, countries like Canada and other operational areas where 7-eleven is working are promoting dot.com business. This promotion is creating an indirect competition for the 7-11.
In the modern world, Walmart created an example of sorts when they organized a retail business in a never before way with the help of the flagship stores where all the daily needs, FMCG and consumer durable goods were available under a single roof. Players like 7-elevens learned their lessons from the Walmart operations and the concept of the mass economy in the retail sector. This concept brought down the prices considerably. A business model emerged where big retail chains started pricing their goods for nominal profits on each good. Apart from the profit, these stores were charging operational costs from the customers (Meyar, 2018).
Concepts like 7-eleven survived in this market well because of their deep pockets for the investment. The invested heavily in the creation of a commercial space, the creation of a big retail space was an entry barrier for the small players in the market. The current dot.com boom erased this entry barrier and now producers are directly selling their goods to the consumers. They are also selling the goods on the nominal goods and attracting minimum operational costs. The economy of the retail business has changed drastically and it can force some challenges for the players like 7-eleven (Business Briefs: Amazon, Verizon, 7-Eleven, 2018).
The world is heading towards becoming a global place, more and more international brands are launching their products in various parts of the world to cater to the cosmopolitan segment of the buyers. Stores like 7-eleven are ideal places for these brands because of their international presence in the market. If we check the operational areas of the 7-eleven at an international scale then we find that most of the new international brand will find it an ideal place to launch their international products. Social acceptance to the international standard products is increasing across the world and places like 7-eleven are setting up right kind of launch pads for these products (Meyar, 2018).
The introduction of the global standard in the field of consumer laws is creating a favorable situation for players like 7-eleven. Almost three decades ago when big retail chains were making an entry in the market space, they promoted the fact that the consumer’s interests are legally more secured when they are making a purchase with a retail chain (Business Briefs: Amazon, Verizon, 7-Eleven, 2018). Unorganized retail players often discourage the consumers to go for legal suits because of the limited resources that they have. Big retail chains on the other hand always keep their suppliers under pressure for the quality of the goods.
At the international level, many countries are ready to give away easy licenses to the players like 7-eleven this is why the legal environment is favorable for them and they can expand their business quite easily.
Check out the details of the PESTAL analysis reports of various industry sectors and read the Technology head in them. You will find that this is the most volatile area of the analysis because the markets of the world have already responded to the changes made by the fourth generation of the industrial revolution. New technologies are changing existing marketplaces; they are creating new marketplaces and challenging the existing business models. Players like 7-eleven can use technology for their benefit and improve or update their services (Strauss, 2018). The same technologies are also posing some challenges in front of them and they should treat it as a high priority risk area.
The stakeholders associated with the operations can be divided into three main heads. First, we have the family that owns the company. In the second layer, we have investors and promoters of the company in its native place. The third layer consists of the international and intra-national franchise owners. Operational heads of all the national and intra-national franchise and other operations directly report to the executive team commissioned by the main organization. The local vendors and goods suppliers are also an integral part of the list of the stakeholder. 7 eleven is a consumer-driven organization and consider consumers as their biggest asset as well as the stakeholders in the business.
Until the year 2017 the company was working with four segment segments, these four segments were convenience-store, superstore, department store, and food services. In order to facilitate these operations the financial services and mail order services were attached to each facility. The organization was divided into zones, zones were divided into countries and each country was divided into the cities. The hierarchy was straight; workers were reporting to the operational heads, operational heads were reporting to the country heads. Country heads were under the zonal heads (Staff Reporter, 2018).
In the year 2017 with an intention to update their service portfolio, seven eleven incepted seven new segments and abolished the previous ones. These segments are domestic convenience-store, overseas convenience-store, superstore, department store; financial services and specialty stores. This new arrangement also left some room for innovative businesses as well. The planners left a considerable chunk of the money to invest in these innovative stores where they can go for the beta testing of various new concepts. Under both the structure the company maintained a line of demarcation between its overseas operations and domestic operations.
Almost three decades ago when the organized retail players made a move in the market, they were catering to the fourth P of the marketing which was Place. The concept of the organized retail was based on the concept of the Place. After the arrival of dot.com boom, they changed this fourth P into the “Perception (Kotlar, 2012).” With the arrival of the online facilities, people are purchasing the products on the merit of the brand perception associated with the goods. The definition of convenience has changed in accordance with the times. In the past organized retail players were offering all the goods near your house under a single roof, it was a convenience for the customer, however, in the current milieu customers are searching for the products on the internet from the comforts of their houses.
The market presence of the 7 eleven can help them in the creation of a trustworthy online brand. Initially, they can go for a customer retention program. Most of the online retail companies are moving ahead with the help of big data facilities. They are taking the support of the big data calculations in order to fix their next moves in this volatile market. 7 eleven has a strong consumer base ready to join them in the next league of the market, all they need is to come up with the latest technology solutions and capture them on a new platform. The current plan of launching a mobile can be a game changer for the company.
Seven eleven holds the reputation of being a leading brand in the market of the organized retail. This brand has done many innovations in the past to create a niche for itself in the competitive retail market. The company can use this tacit knowledge and psychological capital to repackage their offerings and compete in the realms of the online boom.
In the current market, the new players are beta testing their products and methods to approach their customers. A player like 7 eleven has all the good reasons to apply some of the tried and tested formulas of the market in a new market.
Under the current conditions, the organization is going through an environmental change, they are changing the face of their services and adding new technologies in their service portfolios. Under the contemporary framework of change management theories, they can face a major problem of handling the change in the working procedures and technologies. The “Two-factor theory” associated with the employee motivation can be applied here. 7 eleven can come up with some specialized training programs where they can identify certain factors that are not doing well with the employees. After this identification, they can arrange special training programs and remove the dissatisfaction among them. They can also take the support of their psychological capital and celebrate the legacy of the organization to keep the employees united during the time of the changes. Under the current situation, the exercise of motivating the employees should be an important task in their change management program.
Consumer feedback has become the most important variable for researchers across the world. Most of the technology-based products manufacturers are launching their products in a beta testing phase and listening to the feedback of the customers. In the past, we can attribute the success to their lean and mean feedback chain. Now an online feedback mechanism has the power to convert this chain into a sophisticated tool to support the decision making.
Conclusion
The recent launch of the Fuel app in Australia can become a new landmark in the success story of 7 eleven. It should not be termed as another expansion exercise; it should be treated as an entry into a new league with a great legacy from the past. Big retail chains like Wal-Mart and others have set up some interesting examples where they earned the fruits from this changeover of the technologies. The policy statement of the 7-eleven promotes the concept of the 3 C’s. The third C of convenience can be capitalized in the new era of online retail marketing. The report of SWOT analysis and PESTAL analysis tells us that the technological front can be their key result area to obtain success in the markets that will emerge after the fourth industrial revolution. As an organization, they are capable enough to handle the rest of the upheavals of the market quite effectively.
References
Business Briefs: Amazon, Verizon, 7-Eleven. (2018). News 12 Long Island, https://longisland.news12.com/story/39424741/business-briefs-amazon-verizon-7-eleven.
7- Eleven; Vision and mission; Retrieved on 24 October 2018,
( https://corp.7-eleven.com/corp/about )
7-Eleven; corporate level strategies; Retrieved on 24 October 2018,
( https://m.businesstoday.in/story/london-business-school-case-study-on-7-eleven/1/194769.html)
7-Eleven; business level strategies; Retrieved on 24 October 2018,
(https://www.retaildive.com/ex/mobilecommercedaily/7-eleven-reaches-for-competitive-edge-with-utility-driven-fuel-app )
(https://www.cspdailynews.com/catagory-news/foodservice/articles/7-eleven-leveraging-fresh-food-competitive-advantage )
7-Eleven; SWOT analysis; Retrieved on 24 October 2018,
(https://www.marketingstudyguide.com/example-swot-7-eleven/ )
Kotlar, P. (2012). Kotler On Marketing. New York: Simone & Schuster.
Meyar, Z. (2018). 7-Eleven to launch scan-and-go at 14 Dallas stores. USA Today, https://www.usatoday.com/story/money/2018/11/05/7-eleven-launch-scan-pay/1811732002/.
Mourdoukoutas, P. (2018). 7-Eleven Is Trying To Catch Up With ‘Amazon Go’ Cashierless Stores. Forbes, https://www.forbes.com/sites/panosmourdoukoutas/2018/12/02/7-eleven-is-trying-to-catch-up-with-amazon-go-cashierless-stores/#7259187a4e5f.
Staff Reporter. (2018). 7-Eleven now accepts Chinese mobile payment systems Alipay and WeChat. Vancouver Sun, https://vancouversun.com/news/local-news/7-eleven-now-accepts-chinese-mobile-payment-systems-alipay-and-wechat.
Strauss, K. (2018). The Franchise News Briefs: 7-Eleven Franchisees Urged To Skip Annual Company Conference. Forbes, https://www.forbes.com/sites/karstenstrauss/2018/11/29/the-franchise-news-briefs-7-eleven-franchisees-urged-to-skip-annual-company-conference/#3bbaecb1446f.
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