Seven Eleven Japan

This paper explores the strategy and decisions that had to be made when a man named Toshifumi Suzuki, decided to try to bring the Seven Eleven convenience store concept to Japan, having to convince possible shareholders of the franchise in Japan (in this case the father of Tochifumi Suzuki) to take part in the endeavour.

2. Background

2.1. Seven Eleven USA

The Seven Eleven convenience store company was founded in 1927 in Dallas, USA, by the Southland Corporation. It had been very successful in the US. In 2007 it was the largest chain store in the world.

It was however in 1973, some forty years after the first store in the US that Toshifumi Suzuki was ready to meet with possible shareholders by proposing an innovative and forward-looking strategy.

2.2. Japan in 1973

From the 1960s to the 1980s, overall economic growth in Japan had been called a "miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s.

But even though the Japanese economy was blooming in the beginning of the seventies Japan, as some Western counties, suffered from serious oil crisis in 1973. The crisis was a major factor in Japan's economy shifting away from oil-intensive industries and resulted in huge Japanese investments in industries like electronics. Japan fared particularly well in the aftermath of the crisis compared to other oil-importing developed nations. Japanese automakers led the way in an ensuing revolution in car manufacturing. The large automobiles of the 1950s and 1960s were replaced by far more compact and energy efficient models.

In the cities, most people lived in apartments or housing corporations. Land and real estate prices were very high (although not as high as during the famous Japanese asset prise bubble (1983-1990) and people started to move more to the suburbs. Many people commuted for hours to work and within the cities public transportation was heavily used. Unemployment rate was relatively low, Japan has consistently kept it at 2.5% or lower.

2.3. Seven Eleven to Japan

Suzuki’s idea is to franchise the Seven Eleven brand to Japan. There are vast ways to look at when opening up a convenience store and Suzuki must think of in advance what possible drawbacks must be addressed when convincing his father of the start-up of SEJ. Out of the many possible operational hurdles Suzuki might be faced with, the most important once are the following:

• Does a USA convenience store concept fit Japan and its culture?

• High housing price, how to overcome that

• Commuting habits must be considered

– People use public transportation, e.g. metro, bikes, and walk a lot

– Still, frequent traffic jams – unloading stock may be a problem

• How to grow to be able to sustain

• People in Japan pressed with time

• Is there any way to take advantage of the Japanese culture

When thinking of all of these, one must realize that they all must be addressed and included in the strategy and the vision of how to achieve that strategy.

3. How to make Seven Eleven successful in Japan

3.1. The Freshness strategy

Seven Eleven Japan (SEJ) will be number one in fast food sales and freshness will be the name of the game. Freshness will have a manifold meaning, including high quality of perishable products and the provision of a “fresh” set of merchandise to keep up with the changing preference of customers.

SEJ will focus on customers, know what they want, know who they are and will provide stores within walking distance for at least 50% of their customers. SEJ will provide each customer with a predetermined and focused selection of products to shorten the time customers have to spend in store on selecting their buying.

Our most important product will be Bento (lunch), it will be heavily branded and delivered to us at least 3 times a day. Coffee will also be constantly fresh. Products that show a decline in sales will be retired immediately and the shelf space given to new items. Our product categories shall be fresh food, fast food, processed food and non-food products such as magazines and stationery.

3.2. How to achieve the strategy

In order to overcome operational hurdles efficient management is needed, especially