Suppy Chain Homework #1

C. Morgan

Homework 1

1. What is Seven-Eleven Japan’s competitive strategy?

Seven-eleven Japan's convenience store competitive strategy consists of dominating their industry in Japan and replicating their dominance in other countries. Seven-eleven Japan's developed a franchise network and performed daily operations within its franchise system. Their network included both company-owned stores and third-party owned franchises. The franchise commissions accounted for over 60% of revenue from operations in 2004. When they entered a new market they had a cluster of 50 to 60 stores supported by one distribution center. By clustering the stores in one area it allowed them to have a high density market presence and to operate an efficient distribution system. Their competitive strategy for market dominance was to do the following six things, bolster distribution efficiency, improve brand awareness, increase system efficiency, enhance efficiency of franchise support services, improve advertising effectiveness, and prevent competitors’ entrance into the dominant area. Seven-eleven of Japan looks for demand where Seven-Eleven stores already exists, within their area dominance strategy for concentrating additional stores in those specific areas.

Seven-eleven emphasizes regional merchandising to cater precisely to local preferences with each store carrying food items, beverages, magazines, and consumer items such as soaps and detergents. In 2004, Seven-eleven was focused on increasing the number of original items that were available only at their stores.

Seven-eleven added a variety of customer services. They had in-store payment of electric power bills, expanded the set of utilities from which customers could pay their bills, insurance premiums, and telephone bills. With more convenient operating hours and locations than financial institutions, they were able to attract millions of additional customers every year for bill payment services. They also offer...