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ID NO. 12056021004


Case Discussion Question
How would you describe Seven Eleven Japans business strategy?
If we look at a typical organization, every company has a strategy. On the back end, we have
the results you generate. But in most companies, theres an "execution gap" between strategy
and results, which is where real work gets done and where value gets created for a
business. Seven-Eleven Japan business strategy was many locations, rapid replenishment,
appropriate technology deployment, and an equally responsive supplier. Seven-Eleven offers a
broad array of products, including many not traditionally available in convenience stores, to
meet the needs of its customers. Seven-Eleven implements its merchandising strategy through
a variety of means. It employs item-by-item inventory management to keep top-selling items
in-stock. Seven-Eleven works with its vendors and distributors to provide daily delivery of fresh
food and other items to its stores, to lower the cost of delivery, and to shift deliveries to off-
peak hours. Seven-Eleven seeks to provide its customers with a convenient, safe and clean
store environment.
What level of responsiveness are they aiming to achieve?
Seven-Eleven had realized unique growth in the business sector as there was utilization of
supply chain strategy of Seven-Eleven and certain performance drivers upon the balance nature
business responsiveness and the awareness of certain risks involved. For Seven-Eleven to be
successful, efficient consumer response (ECR) approach will be realized that are effective for
store assortments; chain replenishments and efficient promotion as well as product
introduction. Seven-Eleven have found better ways of developing their CDC as well as DSD that
is through information knowledge expertise and the augmentation of their business functions
to deliver frequent product services of varied items and the engagement assurance given to the
customers. Seven-Eleven is aiming to achieve the high level by Increasing same-store
merchandise sales. Providing greater convenience to customers by Expanding in existing
markets. Seven-Elevens store development efforts are focused on its existing markets to take
advantage of population density and traffic. Typically, new stores are concentrated around the
distribution centers, commissaries and bakeries that allow the company to operate more
What risk does a retailer aiming for this level of responsiveness face?
In my think most of companies and organizations which are retailer or convenience store have
responsiveness level. When working with multiple systems, companies often find that each
system requires the same data in order to operate. This requires the company to maintain
duplicate item masters or customer records and often means that transactions must be entered
multiple times into different systems. Duplicate data slows down decisions, since users must
look in multiple systems to find the information they need. The convenience store industry is
highly competitive. In the area of general merchandise sales, convenience stores compete with
national, regional, and local and independent retailers, including grocery and supermarket
chains, grocery wholesalers and buying clubs, fast food chains, and variety, drug and candy
stores, in addition to other convenience stores. In sales of gasoline, convenience stores
compete with other convenience stores, food stores, service stations and increasingly
supermarket chains, hyper-marts and other discount retailers. The rapid growth in the
numbers of convenience-type stores opened by oil companies over the past several years has
also intensified competition.
How has Seven Eleven structured its facilities, information and transportation strategies to diminish
its risk and develop a supply chain structure that is well suited for its business strategy?
Seven-Eleven Japan based on its fundamental network expansion policy to increase efficiency
to customers. Seven-Eleven opened the majority of its new stores in areas with existing cluster
of stores. There are so many stores in a particular area. Around 50 to 60 stores are supported
by only one distribution centre(DC), and this DC keep no inventory. This strategy can lower the
inventory handling cost, and to develop capabilities that support its supply chain strategy in
Seven-Eleven uses scanner terminal to read bar codes and record inventory. It is an advanced
level of inventory management. This allowed a store manager to forecast sales corresponding
to each order accurately. The supplier of each shop won't delivery inventory to appropriate
shop directly, instead of delivering them to the distribution center, the distribution center then
distribute inventory to appropriate store. This can minimize the trucks as well as transportation
Seven-Eleven Japan has chosen to operate a highly responsive operation and has chosen a
supply chain design that supports this strategy. Their facility location choices are to saturate an
area with stores, thereby making it easy for customers to shop and their own delivery trucks to
move from store to store to replenish inventory. Seven-Elevens inventory system is run on an
information system that transmits directly to the supplier and distribution center; goods are
produced using a pull system to replace what has been sold during that delivery period. The
transportation system is flexible to maximize responsiveness while also achieving efficiency.