CASE STUDY

“ 7-ELEVEN STORES”

PRESENTED BY:

Ω HARSHITA KAKAR 1

Ω HIREN TRIVEDI 6

Ω RINKAL SONI 22

Ω AKSHAT KAPADIA 23

Ω PRATIK NAIK 31

Ω JAYDEEP DHRANGA 37

INTRODUCTION TO 7-INTRODUCTION TO 7-ELEVEN STORESELEVEN STORES

∞ Started in 1927 in TEXAS, U.S.A.

∞ World’s largest retail convenience chain store with outlets around the world.

∞ Leader and innovator in using technology to serve customers.

∞ Focuses on paying attention to the fine details of customers’ buying preferences to decide which products are carried in the store.

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

CASE SUMMARYCASE SUMMARY

∞ 7-Eleven was unable to determine which 7-Eleven was unable to determine which items were selling well or which items were items were selling well or which items were most profitable to sell in the 1most profitable to sell in the 1stst place. place.

∞ This made a difference to the company’s This made a difference to the company’s bottom line because of missed sales bottom line because of missed sales opportunities, lower profits & excess store opportunities, lower profits & excess store inventory.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.

∞ 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.

IMPACT OF IMPACT OF INFORMATION INFORMATION

SYSTEM ON 7-ELEVEN SYSTEM ON 7-ELEVEN STORESSTORES

∞ Provides Franchisees with a proprietary retail Provides Franchisees with a proprietary retail computer system that gives them valuable store computer system that gives them valuable store information in an accurate, timely manner. It information in an accurate, timely manner. It includes a state-of-the-art ordering system and includes a state-of-the-art ordering system and electronic scanning cash registers.electronic scanning cash registers.

∞ Is a sophisticated system that automatically collects Is a sophisticated system that automatically collects daily merchandise sales, plus money order and other daily merchandise sales, plus money order and other transaction information, and uses it to prepare sales transaction information, and uses it to prepare sales and inventory reports.and inventory reports.

∞ Tracks employee payroll information and helps Tracks employee payroll information and helps prepare daily cash reports. It automates much of the prepare daily cash reports. It automates much of the store's daily record keeping and provides store's daily record keeping and provides Franchisees with information on product sales so Franchisees with information on product sales so they can do a better job of ordering the products they can do a better job of ordering the products their customers want.their customers want.

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

∞ 7-Eleven stores are not alike. What 7-Eleven stores are not alike. What customers want depends a great deal customers want depends a great deal on the neighborhood & region of the on the neighborhood & region of the country where they are located.country where they are located.

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

Q2.What are the benefits of 7-Q2.What are the benefits of 7-Eleven’s Retail Information Eleven’s Retail Information

System?System?∞ Keeps track of its purchase transactions & Keeps track of its purchase transactions &

analyzes them to collect information about analyzes them to collect information about customer demand, pricing & interest in new customer demand, pricing & interest in new products.products.

∞ Analysis of the data shows which items Analysis of the data shows which items are selling well in which stores, which items are selling well in which stores, which items customers are most interested in, seasonal customers are most interested in, seasonal demand for item & which items are most demand for item & which items are most profitable to sell in the first place.profitable to sell in the first place.

Q3. Which of the strategies Q3. Which of the strategies described in the chapter does the described in the chapter does the

Retail Information System Retail Information System support?support?

Product differentiation:Product differentiation: 7eleven keeps 7eleven keeps

track of its purchase track of its purchase transactions & analyzes transactions & analyzes them to collect them to collect information about information about customer demand, pricing customer demand, pricing & interest in new products & interest in new products through its retail through its retail information systeminformation system

Market Focus Market Focus Niche:Niche:

7eleven stores7eleven stores

are not all alike. are not all alike. What their What their customers want customers want depends a lot on the depends a lot on the neighbourhood and neighbourhood and region of the region of the country where they country where they are located. are located.

COMPETITORS(Competition is fierce)

NEW ENTRANTS

SUBSTITUTE MERCHANDIS

E

SELLER

BUYER

(A Small Threat by New Entrants)

•Major 3 companies•Middle sized companies•Other medium & small companies.

(A big threat by substitute merchandise)

(Bargaining power is weak)•Mainly medium & small sized companiesMajor markets. (Bargaining power

is strong)•Young people, housewives, single men & women.

•Department store•Supermarket•Discount Store

Q4. In terms of Porter’s model, Q4. In terms of Porter’s model, what strategic forces does the what strategic forces does the

Retail Information System seek to Retail Information System seek to address?address?

PORTER’S MODEL FOR 7-ELEVEN STORES

According to seven-eleven CEO and President : “Now we can use technology as a surrogate for being able to talk to every customer who walks in the door.”

CONCLUSIONCONCLUSION