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7-ELEVEN JAPAN CO.

PRESENTED BY: S/LT AAMIR, S/LT ALI, S/LT ARSALAN, S/LT KASHIF

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OUTLINE

• Mission

• Introduction

• History & Profile

• Competitive strategies

• Store information and contents

• Inventory

• Information system

• Distribution system

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MISSION OF 7-ELEVEN JAPANOur purpose and mission is to make life a little easier for our customers by being where they need us, whenever they need us.

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Introduction• 7-Eleven is part of an international chain of convenience

stores.

•  7-Eleven is the world's largest operator, franchisor, and licensor of convenience stores with more than 50,000 outlets.

• 7-Eleven branded stores under parent company Seven & I Holdings Co. are located in 16 countries with its largest markets being Japan (15,000), the United States (8,200), Thailand (6,800), Canada, the Philippines, Hong Kong, Taiwan, and Malaysia.

• 7-Eleven Japan runs all 7-Eleven franchises worldwide and is headquartered in Tokyo, Japan.

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HISTORY AND PROFILE

• Founded by Masatoshi Ito post 2nd World War.

• By 1960, the single store had grown into a $3 million company.

• In 1961, realized that superstores were the wave of the future.

• In 1972, approached Southland Corporation .

• In 1973, Southland agreed to a licensing agreement.

• In 1974, first 7-11 convenience store opened in Tokyo.

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• The company was first listed on the Tokyo Stock Exchange in October 1979.

• In 1990, Southland Corporation entered into bankruptcy protection.

• In 1991, IYG holding acquired 70% of Southland’s common stock.

• Between 1985 and 1994, the number of stores increased from 2,299 to 5,523; sales increased from 386 billion Yen to 1,282 billion Yen; Net income increased from 9 billion Yen to 46 billion Yen.

• In 1994, Seven-Eleven Japan ranked first among Japanese retailers in terms of ordinary profit.

• Same year, customer visits to Seven-Eleven outlets totaled 1.8 billion, which translates to every person in Japan visiting a Seven-Eleven on average 15 times a year!

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• 2000February Establishment of e-commerce company, 7dream.com

• 2003August Total number of stores reached 10,000.

• 2005February 7-Eleven, Inc., became a subsidiary of Seven-Eleven Japan. ATMs installed at Seven-Eleven stores reached 10,000.

• In 2012 their total sales were 3500 billion yens.

• As of June 2013 7-Eleven has 15,504 stores in Japan alone.(source http://www.sej.co.jp/company/en/g_stores.html)

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Total no of stores

http://www.sej.co.jp/company/en/s.growth.html

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Total Sales

http://www.sej.co.jp/company/en/s.growth.html

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What made them so successful????

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Obviously Their SCM!!!!

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7-Eleven Japan’s Competitive Strategies

• To provide high-availability of a variety of reasonable quality products at reasonable price.

• Cluster of stores (50-60) in small geographical area supported by a Distribution Centre (DC)

• Commitment to customers and friendly service. Greater familiarity with customers .

• Outsourcing policy and ability to manage suppliers relationship.

• First mover advantage

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Continued• Customer checkout process . Clerk records the customer’s

gender, (estimated) age and purchased items. These Point of Sales (POS) data are transmitted to database at the headquarters.

• Daily use of the data

• Headquarters aggregate the data by region, products and time and pass to suppliers and stores by next morning. Store managers deduce trend information.

• Preventing entry by competitors.

• Combination of Own and Franchisee Stores. gross profits shares (45% SEJ; 55% store)

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Continued

• Area/Market Dominance Strategy and it’s advantages were:• High Distribution Efficiency

• Brand Awareness

• System efficiency

• Franchisee Support Services

• Advertising effectiveness

• Entry barrier for competitors

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Store information and contents• Store size = 150m2, 3000 items.

• Average inventory at store of 3000 Stock Keeping Units (SKU), with max capacity of 5000 SKUs.

• Products include:• Food Items

• Beverages

• Magazines

• Soaps, Detergents etc.

• Game, Software

• Seasonal items

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Store services• In 1999, payment for Internet shopping.

• In 2001,7dream.com was launched.

• In 2009, ATMs had been installed in all stores in Japan.

• Photocopier

• Ticket Sales

• Payment of Bills• Electricity

• Telephone

• Gas

• Insurance Premium

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Continued• Accepting Installments on behalf of credit companies.

• Meal Delivery service for aging population of Japan.

• Pick up location for parcel delivery.

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Information System• Graphical order terminal—manager Info. & order.

• Scanner terminal- receiving & inventory.

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• POS register – real-time data on sales, customer, data analyzed overnight for company, district, and store.

• Store computer: it was linked with GOT,POS,

Scanner terminal through ISDN with DC’s &

Headquarter. which helped in deducing trend of sales and

Customers.

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• Data was relayed to Suppliers, Distribution Centres and the Headquarters automatically.

• Increased both efficiency and responsiveness.

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Sourcing • Outsourced transportation.

• From DC to Stores to Transfleet Ltd.

• Risk of Fuel Price Fluctuation, Fleet Maintenance and Cost of Fleet staff was transferred.

• The company increased profits and reduced risk.

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7-Eleven’s Distribution System• The major objective was to carefully track sales of items & offer

short replenishment cycle times.

• When a store placed an order , it was immediately transmitted to the supplier as well as to the distribution center.

• Key to store delivery was what 7-eleven called combine delivery system.

• The distribution system enabled &-eleven to reduce no of vehicles required for daily delivery service to each store , even though delivery frequency was high.

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Queries ??????