case study on 7-eleven

7/29/2019 Case Study on 7-Eleven

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CASE STUDY ON 7-ELEVEN


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INTRODUCTION TO 7-ELEVEN

Started in 1927 in TEXAS, U.S.A.

Worlds largest retail convenience chain store with outlets aroundthe world.

Leader and innovator in using technology to serve customers.

Focuses on paying attention to the fine details of customersbuying preferences to decide which products are carried in the

store.

Communicates both with the large suppliers as well as with thesmall suppliers by employing different modes of technology.


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CASE SUMMARY

7-Eleven was unable to determine which items were selling well or

which items were most profitable to sell in the 1st place.

This made a difference to the companys bottom line because of

missed sales opportunities, lower profits & excess store inventory. In 2004, 7-eleven installed Hewlett-Packard servers & networking

switches in all its US stores to implement a retail Information System.

Management uses this information to identify sales trends, improve

product assortment, eliminate slow-moving products from inventory &

increase same-store sales by stocking products that are high in demand.


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CASE SUMMARY

Due to Information technology, 7-Eleven has come full circle in

its ability to respond to the needs of the customer by tracking &

analyzing its data, it knows its customers as intimately as it did

when store owners talked to each customer face to face.


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IMPACT OF IT

Provides Franchisees with a proprietary retail computer system thatgives them valuable store information in an accurate, timely manner. Itincludes a state-of-the-art ordering system and electronic scanning cashregisters.

Is a sophisticated system that automatically collects daily merchandisesales, plus money order and other transaction information, and uses it to

prepare sales and inventory reports.


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Q1.Why is knowing about the customers so important to acompany such as 7-eleven?

7-Eleven stores are not alike. What customers want depends a

great deal on the neighborhood & region of the country where

they are located.

Eg: What sells well in Boston may not work in Texas.


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Q2.What are the benefits of 7-Elevens Retail Information

System?

Keeps track of its purchase transactions & analyzes them to

collect information about customer demand, pricing & interest in

new products.

Analysis of the data shows which items are selling well in

which stores, which items customers are most interested in,

seasonal demand for item & which items are most profitable to

sell in the first place.


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Q3.Which of the strategies described in the chapter does

the Retail Information System support?

Product differentiation:

7eleven keeps track of its purchase transactions &

analyzes them to collect information about customer demand,

pricing & interest in new products through its retail information

system

Market Focus Niche:

7eleven stores

are not all alike. What their customers want depends a lot on the

neighbourhood and region of the country where they are located.


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Q4.In terms of Porters model, what strategic forces does

the Retail Information System seek to address

NEW ENTRANTS: A Small Threat by New Entrants

SELLERS: Bargaining power is weak

Mainly medium & small sized companiesMajor markets.

BUYERS: Bargaining power is strong

Young people, housewives, single men & women.


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SUBSTITUTES: A big threat by substitute merchandise

Department store

Supermarket

Discount Store

COMPETITION: Major 3 companies

Middle sized companies

Other medium & small companies.

case study on 7-eleven

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