About us

PlsLorv and 8uslness Model

Industry Ana|ys|s
9orLer 3 forces and kSl
,arket|ng 5trategy
onsumers
ompeLlLors
4 9s
5upp|y Cha|n and 8us|ness rocess
lsLrlbuLlon SLraLeav
oncepLs AalllLv AdapLablllLv AllamenL
Agenda
ounded |n 1927 by the 5outh|and Corporat|on |n Da||as U5A 1hey |nvented the Conven|ence 5tore
concept
In 1962 they started to exper|ment w|th the 24 hour schedu|e
8y 1980 they a|ready had more than 6000 out|ets
In 1980 the company ran |nto f|nanc|a| d|ff|cu|t|es and was rescued from banckruptcy by Itookado
|ts |arges fransh|see
1he Iapanese company ga|ned a contro|||ng share of 7L|even |n 1991 dur|ng the Iapanese asset
bubb|e of the ear|y 1990s Itookado formed 5even I no|d|ngs Co and 7L|even became |ts
subs|d|ary |n 2005
At present7L|even |s the wor|d's |argest operator franch|sor and ||censor of conven|ence stores
(|argest conven|ence reta|| cha|n) w|th approx|mate|y 6000 stores the company operates and
franch|ses |n the Un|ted 5tates wh|ch more than 4700 are franch|sed Cverseas 7L|even ||censees
and aff|||ates operate more than 29700 (|nc|ud|ng Iapan 1a|wan 1ha||and 5outh korea Ch|na nong
kong ,a|ays|a ,ex|co 5|ngapore Austra||a h|||pp|nes Indones|a Norway 5weden and Denmark)
About 5even L|even
7leveo loc (7leveo) ls o tetollet opetotloo cooveoleoce stotes lt ls eooooeJ lo ftoocblsloo ooJ llceosee
bosloess of cooveoleoce stotes olobollv 1be ptoJoct lloe of tbe compoov locloJes olfts bevetooes electtoolcs
occessotles movles lotetootloool collloo cotJs vlJeo ooJ compotet oomes os well os setvlces locloJloo pte
polJ tox flllloo cotJ floooclol setvlces socb os lssoloo cosb cotJs mooev otJets ooJ cteJlt cotJs etc
% @o conslsLenLlv serve
Lhe chanalna needs
of cusLomers
for tbelt convenlence
Mlsslon
% @o be Lhe besL
reLaller of
convenlence
vlslon
% ServanL Leadershlp
% @he 7Lleven Wav
ulLure
Capac|ty WhaL vou coo do Lo lead
Comm|tment WhaL vou woot Lo do Lo lead
Character WhaL vou wlll do Lo lead
I Integr|ty
C Customer ocus
A Accountab|||ty
k kecogn|t|on
L Lxce||ent Lxecut|on
abouL
eop|e 1eamwork
7 L|even A Wor|d C|ass Crgan|zat|on
Compet|tors
PlahLrafflc slLes
verv fraamenLed lndusLrv (Lop 30
o 33 sales)
Ma[or lrcle k 9anLrv Lxxon
5ubst|tutes
+ Cas sLaLlons arocerv sLores
mass merchandlsers warehouse
clubs resLauranLs (prepared
meals)
5upp||ers
luel Supplv aareemenLs
(volume) Cll o reflnerles
dlsLrlbuLors Low Maraln
nonfuel Lona@erm onLracLs
manufacLurers arocerv
wholesalers dlsLrlbuLors
Customers
+ rlve Lhe demand
+ ompeLlLlve prlclna
+ LffecLlve merchandlslna
+ PlahLrafflc locaLlons
8arr|ers to Lntry
+ Larae companles advanLaae ln
purchaslna and flnance
Small companles can compeLe
effecLlvelv bv acqulrlna superlor locaLlon
or offerlna speclallzed merchandlse
U5 conven|ence U5 conven|ence
store |ndustry store |ndustry
0000 sLores 0000 sLores
$300b revenue $300b revenue
Industry Ana|ys|s
orter 5 orces
8us|ness ,ode|
olna 8uslness olna 8uslness
%non manufacLurer
%ommlLmenL wlLh vendors ln order Lo beLLer meeL Lhelr cusLomers expecLaLlons
%AllanmenL wlLh suppllers so as Lo creaLe a Lhreewav wlns for cusLomers vendors and 7Lleven
Worklna @oaeLher Cnllne
Webbased wav for poLenLlal and exlsLlna buslness parLners Lo work easllv wlLh 7Lleven
Worklna @oaeLher Cnllne
Webbased wav for poLenLlal and exlsLlna buslness parLners Lo work easllv wlLh 7Lleven
%8eLLer collaboraLlon and communlcaLlon of Lhe crlLlcal buslness lnfo
%new vendor/Suppller AppllcaLlon 9rocess
%7Lleven 9ro[ecL lorum
% 8ld esLlmaLe or quoLe pro[ecLs
% nvolce for pro[ecLs
% DpdaLe pro[ecL Llmellnes
% 9rovlde equlpmenL relaLed lnformaLlon
8us|ness key 5uccess actors
ke||ab|e and fast 5upp|y Cha|n
emand forecasL Supplv 9lannlna
Lhrouah @ svsLems
nLenslve dlsLrlbuLlon sLraLeav
Lo keep cosL low
Culck response Lo demand shlfLs
8alanced lnvenLorv
8elaLlonshlps wlLh suppllers
Lmplovee Lralnlna
Locat|on |ocat|on |ocat|on
@rafflc
vlslblllLv
8rand Awareness
9urchase lnLenLlon
onvenlence
nelahbourhood ommunlLv
lnvolvemenL
7L|even's ,arket|ng 5trategy
ast and llexlble offer adapLed Lo
cusLomer's chanalna wanLs and
needs due Lo advanced @ svsLems
ompeLlLlve pr|ces compared Lo Lhe
resL of compeLlLors lncludlna even
supermarkeLs (for hlahlv demanded
producLs)
Conven|ence LocaLlon openlna
hours (4hours) assorLmenL
communlcaLlons promoLlons
"Oh thank
heaven for
7 eleven
"Oh thank
heaven for
7 eleven
7L|even's Consumers
9eople Cn
@he ,ove
All Ages
All Genders
Look for spec|f|c producL 8uv when need
8epresenL an accuraLe samp|e of soc|ety
9urchase can be |mpu|s|ve |ast m|nute /or urgent
#7leveo stotes ote pott of tbe neiohborhood ooJ
commltteJ to setvloo tbe chonoino needs of costomets
4's roduct assortment
Around 2000 new products
as 70 of ,erchand|se
be rep|aced w|th|n 1 year
In response to customer's
taste and needs sh|fts
3000 products a a|| year
I1 Integrated ,u|t|med|a
5ystem allow manaaers Lo know
WhaL Pow When @o Whom
9roducLs sold LoaeLher
And Lo shorLen leadLlme from
PC declslon Lo each sLore
4's r|c|ng strategy
9ush more prof|tab|e pr|vate|abe|
producLs
Compet|t|ve prlces vs arocerv sLores
Aaaresslve prlclna on h|ghvo|ume
evervdav lLems Lo allav Lhe
percept|on lLs prlces are hlaher
Lhan Lhose aL arocerv sLores
locus on freshfood offerlnas and
7se|ect own brand
4's |ace keta|| 5tores
1he CU15IDL
nLersecLlons/Lrafflc llahLs
Medlum slze ouLleLs
9arklna/Plah Lrafflc
nvolved ln a communlLv
1he IN5IDL
omforLable low
corrldors
vlslblllLv
9roflLable paLhwav
9roducL dlsplav
Cr|t|ca| factor
for reLallers
as lL parLlv
deLermlnes
Lhe
prof|tab|||ty
of Lhe buslness
4's romot|ons and Commun|cat|on
kad|o and outdoor when ln Lhe car
AL Lhe mov|es and sport|ng evenLs
Cn||ne aL lacebook @wlLLer and slurpeecom
@o Lhelr ,ob||e phone
keach consumers
wherever they are
Lmot|ona||y creat|ve
and rat|ona|
promot|ons
kw|kL,arts @he Slmpsons 7Lleven
7Lleven koad 1r|p ka||y 8eallLv Show
Iron ,an 2 ollecL llke a super hero Llve llke
a bllllonalre"
V|ra| 5|urpee on facebook
11
th
of Iune (7/ dav) lree Slurpee
7Lvelen vcllna Leam
2|nga soc|a| 7eleven aame
7e|evens roduct Deve|opment
CoDeve|opment w|th
,anufacturers w|th 7L|even
1ak|ng the Leadersh|p ko|e
@he advanLaaes for Lhe
manufacLurers are
Mooofoctotets ptoJocts ote
so/d extensive/y in the cha|n
stores of 7L|even spread all
over Lhe counLrv
esu/ts of product morketino
ote collectoble osloo tbe lO5
(lolot of 5oles) svsLem
ctoclol Joto of coosomets ooJ
motket wblcb ote loJlspeosoble
for future deve|opment of
Lhelr producLs are obLalnable
@he advanLaaes LhaL 7Lleven
en[ov are
lot o petloJ of tlme 7
leveo coo sell tbose oewlv
developed producLs on an
excluslve basls allowlna
d|fferent|at|on from
compet|tors
Obtolo informotion from
monufocturers prior to
other compet|tors
7Lleven !apan also codeveloped
new producLs wlLh ma[or food
manufacLurers @hls meLhod ls
called codeve|opment or team
merchand|se
A daLa reposlLorv provldes sLore manaaers wlLh
lnformaLlon on whaLs selllna buL Lhe manaaers use Lhelr
own onthespot know|edge of Lhe nelahborhood Lo make
flnal orderlna declslons
8v addlna local conLrol of Lhe orderlna process 7Lleven
Lakes Lhe opposlLe approach Lo WalMarL SLores ncs
muchheralded replenlshmenL supplvchaln model ln
whlch producLs are auLomaLlcallv reordered once sLocks
fall below a cerLaln level
7L|evens |nstore rocess
5tore ,anagers
1hey oversee store operat|ons
expenses and prof|ts organ|zat|on
emp|oyees and |nventory backed by
ass|stant managers who ensure that the
customer env|ronment |s c|ean and
fr|end|y day to day
Lmp|oyees
1hey are tra|ned to be representat|ves of
7L|even to the eyes of the costumer |n
terms of costumer serv|ce and funct|ons to
be performed
@hev recelve Lhe merchandlse from vendors or from seven
eleven's dlsLrlbuLlon cenLer and lmmedlaLelv allocaLe
Lhem ln Lhe correspondlna area
9roducLs poslLlon ln shelves are chanaed 3 Llmes a dav
because dlfferenL producLs are demanded ln dlfferenL
Llmes of Lhe dav
Crders for freshfood lLems are aaareaaLed aL 7Lleven
headquarLers and LransmlLLed Lo LhlrdparLv commlssarles and
bakerles whlch prepare Lhem for dellverv Lhe nexL dav bv one
of Lhe companvs dlsLrlbuLlon cenLers around Lhe counLrv
7L|evens Log|st|cs rocess
@he svsLem connecLs sLores Lo McLane ompanv nc 7Llevens
prlmarv wholesale dlsLrlbuLor and Lo Lhe commlssarles and
bakerles LhaL provlde freshfood producLs @hev work closelv
wlLh 7Lleven and Lhe suppllers Lo come up wlLh Lhe mosL
efflclenL dlsLrlbuLlon process we can
5tore managers enter orders |nto
workstat|ons or handhe|d computers by
10 am da||y
8y 11 am orders have been conso||dated
by LD5 (L|ectron|c Data 5ystem) and
d|spatched to 7L|evens supp||ers
1hrough a system|zed d|str|but|on p|an
a|| goods from more than 100 supp||ers are
hand|ed by the d|str|but|on center centra||y
WlLh Lhls meLhod suppllers flnd lL easler Lo handle Lhe
dlsLrlbuLlon of 7LLLvLn producLs SLores are also able Lo have
mlnlmal sLock and enhance manaaemenL of sLore space
1ruck dr|vers carry cards w|th bar codes
that are scanned |nto store computers
when they arr|ve w|th a de||very
f a drlver ls ofLen laLe Lhe operaLor wlll revlew hls rouLe and
mlahL add anoLher Lruck Lo llahLen Lhe load
,a|n supporters of 7L|evens Log|st|cs 5ystem
Informat|on 5ystem
SevenLleven's new Lechnoloav aave lL four advanLaaes
@he flrsL was ln mon|tor|ng customer needs nsLead of pushlna producLs on Lo cusLomers
companles were belna pulled bv cusLomer needs
Second 5evenL|even uses sa|es data and software to |mprove qua||ty contro| pr|c|ng and product
deve|opment @hanks Lo lLs svsLems Lhe companv can collecL sales lnformaLlon from all lLs sLores
Lhree Llmes a dav and analvse lL ln rouahlv 0 mlnuLes
@hlrd techno|ogy has he|ped to pred|ct da||y trends As cusLomers become more flckle producL
cvcles are shorLenlna WheaLher ls also Laken lnLo accounL
llnallv SevenLleven's elecLronlc lnvesLmenL has a|so |mproved the eff|c|ency of |ts supp|y cha|n
Crders flow qulcklv @hose senL ln bv 0am for dellverv afLer 4pm are elecLronlcallv processed ln
less Lhan seven mlnuLes
,a|n supporters of 7L|evens Log|st|cs 5ystem
5tore
Crder|ng
5a|es Ana|ys|s
Account|ng Cash
keports ayro|| etc
1ra|n|ng
Vendors
Io|nt D|str|but|on
,cLane
D|rect 5tore De||very
(D5D) Vendors
neadquarters
,erchand|s|ng
Informat|on 5ystems
|e|d Cff|ce
Account|ng
,arket Cff|ce
||e transm|ss|ons
5oftware d|str|but|on
Informat|on 5ystem (cont|nued)
,a|n 5upporters of 7L|evens Log|st|cs 5ystem
Io|nt De||very 5ystem
4 7Lleven wanLed Lo be recoanlzed as Lhe companv who provlded Lhe convenlence of
onesLop shopplna vou can flnd all Lhe producLs vou wanL Lo buv ln Lhe sLore
4 lor Lhls purpose 7Lleven !apan had Lo creaLe a svsLem of small loL dellverv and hlah
frequencv dellverv
AdvanLaaes
lt ls posslble to sbotteo tbe Jellvetv
Jlstooce ooJ tlme
keJoctloo of tbe oombet of Jellvetv voos
uellvetv volome to tbe stote pet Jellvetv
locteoses ooJ tbe efflclencv of Lhe
loadlna capaclLv lmproves
,a|n 5upporters of 7L|evens Log|st|cs 5ystem
Io|nt De||very 5ystem (cont|nued)
n order Lo keep Lhe LasLe and freshness of foodsLuff aL Lhe hlahesL level an approprlaLe
LemperaLure for all foodsLuff musL be malnLalned durlna dellverv
,a|n 5upporters of 7L|evens Log|st|cs 5ystem
Dom|nant 5trategy
Seven eleven baslcallv focuses Lhelr operaLlon ln cerLaln areas whlch Lhen
are crowded wlLh mulLlple sLores
@he maln advanLaae of Lhls sLraLeav are
keduced Costs because of shorLer dlsLances
keduced De||very 1|me
keduced advert|s|ng expenses because of less covered area
8etter store management from corporate as lleld Cfflce Manaaers can ao
around Lhe sLores more ofLen alvlna ouL cruclal advlce and supporL Lo sLore
manaaers
Ag|||ty
1 8ealLlme svsLems detect changes
ln cosLumer preference and track
data on sa|es and consumers aL everv
sLore
2 ollaboraLlve re|at|onsh|ps w|th
supp||ers
3 ependable loalsLlcs svsLems
Adaptab|||ty
1 !olnL lsLrlbuLlon
2 Lxpanslon of Lhe types of veh|c|es
from Lrucks Lo moLorcvcles boaLs and
hellcopLers
A||gnment
1 Lxchanae of lnformaLlon freelv
wlLh vendors
2 LqulLable share rlsks cosLs and
aalns of lmprovemenL lnlLlaLlves
7L|evens
1r|p|eA 5upp|y
Cha|n 5trategy
;u|ck changes |n demand
ue Lo
1 Weather flucLuaLlons
2 Act|v|t|es ln Lhe nearbv
areas
3 Impu|s|ve behavlor
De|ays |n d|str|but|on
ue Lo
1 @he spread of stores ln kev
locaLlons
2 conLlnuous rep|en|shment
requ|rements
Cha||enges of V|rtua|
Integrat|on
Allanlna |nterests of SL wlLh
Lhose of 3
rd
parLles
Source @he LrlpleA Supplv haln P88 Pau L Lee
@he sLrenaLh of 7Lleven resldes ln lLs endless efforLs Lo deve|op
"|nnovat|ve bus|ness processes" such as conslsLenL producLlon
dlsLrlbuLlon and sales svsLems" Leam merchandlslna" and [olnL dellverv"
@he |nnovat|on of processes creates d|fferent|at|on from others and bullds
up lLs advanLaaeous poslLlon amona lLs compeLlLors
7Lleven lavlshlv |nvests |n the construct|on of the |nfrastructure
support|ng "|nnovat|ve bus|ness processes" Lhe lnformaLlon svsLems"
whlch help Lo connecL deparLmenLs oraanlcallv and enhance Lhe
manaaemenL efflclencv of Lhe whole oraanlzaLlon
7Lleven relavs heavllv on the |nput or formu|at|on of hypothes|s by the
store emp|oyees ln order Lo aeL accuraLe lnformaLlon on "demand by
|tem"
Conc|us|ons
8ackup 5||des
7L|even Compet|tors
Compete on
LocaLlon
Cpenlna hours
9rlce
9roducL assorLmenL
8rand awareness
Compete w|th
4 hours convenlence
sLores
SupermarkeLs chalns
SlnalesLores
Cas sLaLlon sLores
7L|evens Intens|ve
De||very 5ystem
Source @he Success of 7Lleven !apan
Lxamp|e of the |ntergrated system of product|on
d|str|but|on and sa|es Ice Cream
Source @he Success of 7Lleven !apan