SEVEN ELEVEN JAPAN CO.

SUBTITLE

TABLE OF CONTENTS
Timeline

Seven Eleven Growth

Seven Eleven Unique Selling Proposition Market Dominance Strategy

Food Items Classification

Facilities at the store Schematic representation of the supply chain Case Question Discussions

TIMELINE COLLECTION
First Seven Eleven Convenient Store opened in Tokyo 2001 stores were opened IYG Holding was formed which Acquired 70% of Southlands Common Stock The standard size of new stores changed from 125 to 150 sq.mt Seven & I launched 7 premium private brand products

1973

1974

1979

1984

1990

1991

2002

2004 2005

2007 2009

Established by ITO YOKADO

Listing on Tokyo Stock Exchange

Southland corporation entered into bankruptcy protection

The number of convenience stores reached 42,000

Seven & I Holdings was established through a stock transfer

Number of Seven Eleven store reached 12,753 with an annual sales of 2784.9 billion Yen

SEVEN ELEVEN GROWTH

14000

12000
10303 10000 8153 8000 6000 4000 2299 0.7 801 109.8 386.7 2000 0 15 780.3 3954 1963.9 2046.6 1392.3 2114 2213.2 5905 8602 9690 9060 10826

11310

12298 11735 12034

12753

1974

1979

1984

1989

1994

1999

2000

2001

2002

2003

2343.2

2004

2440.8

2005

2498.7

2006

2533.5

2007

2574.3

2008

2762.5

2009

Number of Stores

Annual Sales (billion yen)

2784.9

 The Store Size was 150 sq. mt.

Average Inventory capacity of about 3000 SKU / store with max. capacity of 5000 SKU Provides customers high accessibility while retaining the product quality Cluster of stores (50 to 60) in small geographical area support by a Distribution center

SEVEN ELEVEN UNIQUE SELLING PROPOSITION

MARKET DOMINANCE STRATEGY

High distribution efficiency Improved brand awareness Increased system efficiency Enhanced efficiency of franchisee support services Improved advertising effectiveness High entry barrier for competitors

Chilled Temperature Items

Warm Temperature Items

Frozen Items

Room Temperatu re Items

SANDWICHES

SWEETS

MILK

01

02

03

Chilled Temperature Items

Warm Temperature Items

Frozen Items

Room Temperature Items

BOX LUNCH

RICE BALLS

FRESH BREAD

01

02

03

Chilled Temperature Items

Warm Temperature Items

Frozen Items

Room Temperature Items

ICE CREAM

ICE CUBE

01

02

Chilled Temperatu re Items

Warm Temperature Items

Frozen Items

Room Temperature Items

CANNED FOOD

INSTANT NOODLES

01

02

FACILITIES AT THE STORES

Payment Of bills like Electricity, Telephone Accepting installments on behalf of credit companies Payment for Internet shopping ATM facilities Meal Delivery Service 7dream e-commerce

CHAIN
Supplier (Chilled Temp) Supplier (Warm) Supplier (Frozen) Supplier (Room Temp)

DC

Stores

Stores

Stores

Stores

50 60 Stores
Stores Stores Stores Stores

FRAMEWORK
Competitive Strategy

Supply Chain Strategy Efficiency Supply Chain Structure Responsiveness

Logistical Drivers

Facilities

Inventory

Transportation

Information

Sourcing
Cross Functional Drivers

Pricing

QUESTION 1

Seven-Elevens supply chain strategy in japan can be described as attempting to micro-match supply and demand using rapid replenishment. What are some risks associated with this choice?

 Rapid replenishments refers to goods that have a shorter shelf life

The demand for such goods is very continuous and at the same time variable even within a day In order to satisfy this fluctuating demand the distribution system of Seven Eleven is very responsive, efficient & support by the IT system

RISKS Involved: High Operational Cost Heavy reliance on IT and transportation

QUESTION 2

Seven-Eleven does not allow direct store delivery in japan but has all products flow through its distribution center. What benefit does Seven-Eleven derive from this policy? When is direct store delivery more appropriate?

BENEFIT FROM THE POLICY: Increase transportation efficiency Increased Package Handling Capabilities It allows careful tracking of sales Reduction in delivery cost Enables rapid delivery of fresh food

DIRECT STORE DELIVERY IS MORE APPROPRIATE: Store only purchases from a few manufacturers/suppliers Items are high value and low demand Warehousing space is limited in the supply chain

QUESTION 3

What do you think about the 7dream concept for SevenEleven japan? From a supply chain perspective, is it likely to be more successful in japan or in the USA? Why?

The 7dream concept is not such a good idea because The store would be acting as a pick up area which will require a large storage area Requirement of a independent tracking system for this service which would increase the operational cost

Moreover, the store would be responsible for the loss of any commodity which would hamper the brand image and credibility of the company

The concept if implemented would be more successful in Japan as compared to America because The store density is more in Japan as compared to USA Accessibility is hence more in Japan as compared to USA

Americans prefer their items delivered to their home directly instead of collecting from some store by paying a nominal amount. In case of Japanese its just the other way round