Case Analysis: Seven-Eleven Japan Co.

CASE Analysis: Seven-Eleven Japan Co.

The case describes how seven eleven has successfully established an innovative business model.

Toshifumi Suzuki, CEO of Seven eleven Japan (SEJ), described Seven Eleven Stores as:

“Stores where you can find a solution for any of your daily life’s problems. We always try to plan and design a store in such a way that our store neighbours, in particular, can get whatever they need at any time they want”

SEJ, headquartered in Japan, leads the world wide seven Eleven chain, which had 24,912 stores in 18 countries in March 2003.In 2003 ranking of retailers by market value, SEJ was number one in Japan. Since its establishment in 1974, SEJ has never experienced a fall in income or profits.

With 9,757 stores as of May, 2003, SEJ is the largest CVS chain in Japan. Its stores feature the same basic designs: large, highly visible sign in green, red and orange, a large store window, much brighter than average lightning and a spotlessly clean store. SEJ identifies their customer orientation, offering not only a rich assortment of products but total comfort to customers, as the source of SEJ’s rise to the top of the Japanese retail industry.

Industry Background

The Japanese Distribution System

Prior to 1974:

Traditional Japanese retailing consists of a conservative, multi-tiered system that combines large numbers of small wholesalers and retailers into complex exclusive networks. These networks are not based solely on economic efficiency but also on tight human relationships.

The wholesale to retail level ratios (W/R) is measure of layers within distribution system.

W/R ratio | 1992 | 1998 |

US | 0.98 | - |

Japan | - | 2.3 |

Although the development of information technology in the industry has gradually improved the efficiency of the distribution system, small-to-medium-sized retailers owe their existence mainly to the multi-tiered and vertically integrated structure.

Retail Business Environment

The Japanese...