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7-Eleven in Taiwan: Adaptation of

convenience stores to new market


environments
Student Name:
Bettina Steinhauser NGX150247
Lee Yean Hong CGA130142
Tai Boon Thiam CGA140043
Timothy Lee Tek Wang CGA130139
Wang Dapeng CGA140086
Wong Han Chion CGA140085

Strength:
Operational strength
1. 7-Eleven Taiwan is the largest convenient stores operate
and franchise their businesses in Taiwan.
Marketing/Product
2. 7-Eleven Taiwan able to localize its product offered by
providing a local flavour to its customers by selling products
i.e. tea eggs, fantuan, baozi etc

Weakness:
Operational weakness
1. 7-11 operate its stores mainly in residential
communities within city centers with target
customer mainly housewives.
2. Conformity with US model which might not suit
the Taiwan market, eg. store space and food
selection.

Marketing/Product
3. T-11 Taiwan able to provide low-cost, tasty and hygienic
fast-food in niche market compared to street vendors.

Marketing
3. 7-11 positioned in Taiwan as high-end
convenience store but their target customers are
price sensitive housewives.

Logistics/Operation
4. 7-11 franchise its transportation whereby each individual
driver is responsible for their own vehicles and ensure timely
deliveries.

Financial and organisational weakness


4. 7-11 Taiwan opened stores simultaneously in the
north, central area and the south of Taiwan which
will spread the group resources thin.

Management
5. PCSC was pioneer in the concept of convenience store in
Taiwan.

Financial weakness
5. 7-11 buying premise rather than renting which
lead to high upfront cost.

International Expansion strategy


Management
6. 7-Eleven Taiwan leverage on 7-Eleven Inc's (US) past
experience and business model in understanding and operate
the market better.

Global Strategy
All the 7-E followed the American format

Franchising / Legal
7. 7-Eleven Taiwan able to franchise its convenient stores Less capital expenditure (eg. no need to buy property for
store openings) and less managerial time spent in monitoring
the operations. This will result in rapid growth and greater
flexibility in the choice of sites and store location.
Management
8. 7-11 being part of a conglomerate - UPEC developing an
(Logistics) in-house infrastructure and leveraging on its own
internal network (i.e. warehouses and logistics) to meet the
need of 7-11 stores for higher efficiency and lower costs
(saving in space and recurring expenses).
Technological strength
9. Technology advancement - Constantly upgrading their ecommerce system (EOS > POS > Graphic Ordering Terminal >
Mobile Office platform) to improve the operation process.
Physical / Operations/ Reputational Strength
10. Setting of 7-11 convenience store with bright, neat and
well-lit environment made an impact compared to local stores

which were cramped, musty and dark able to enhance


customer experience.
Marketing / R&D / Innovational Strength
11. 7-11 establish Ibon (e-commerce kiosk connected to a
cloud server) able to increase footfalls into the stores.
12. 7-11 offer seating area for the seniors and children, taxi
Service for handicapped person and provide assistance to
customer who had drunk too much alcohol to drive home
provide convenient to customers.
13. 7-11 provide I-cash cards and collaboration with EasyCard
Corp (Cashless) and telco prepaid cards.
14. 7-11 was the first pre-ordering fee-based services - for
customers with less time shopping due to longer working
hours.

Opportunities:
Socio-cultural opportunities
1. Taiwan at 616 persons/km2 has the
second highest population density in
the world.
2. Taiwan consumers are obsessed with
immediacy.
3. Changed work routine of working
population resulting less time to regular
shopping due to long working hours.
4. Taiwanese people are inclined to
coffee either cold or hot weather530,000 cups sold everyday at
convenience stores.
5. Entrance into Shanghai, China - both
have similar socio-cultural background.
Economical opportunities
6. Taiwan has low inflation rate and high
growth rates (one of Asia's economic
tigers).
7. Retail trade in Taiwan was valued at
$116.85 billion in 2010 (14% of GDP).
8. Taiwanese entrepreneurs are inclined
to the franchising model.
9. Offer low-cost, tasty and hygenic food
compared to current street vendors who
offer not entirely hygenic food.
Political opportunities
10. Taiwan governments steady

Financial Strength
15. Growth in revenue and profit for 7-Eleven Taiwan (largest
retailer with revenue NT$10.8 billion) results from smooth
expansion on the business.
SO Strategies:
1. S15 + O3 - Market Research (Functional -level) To
conduct further studies on the work routine pattern of the
working population to capture their purchase of products in 7Eleven.
2. S15 + (O1, O6, O14) - Marketing Strategy (functional-level)
To spend available funds from retained earnings to develop
further marketing strategies to capture more consumers to
spend their money in purchasing producsts from 7-Eleven.
3. S15 + O15 - Operations Strategy (functional-level) To
reinvestment retained earnings in IT investment to support
the future operations in accordance to technological changes
4. S13 + O5- Diversification Strategy (Business-level) To
duplicate its existing business model of telecom business (7Mobile) and iCash cards to China.
5. S3 + O2 , S8 + O4 - Diversification Strategy (Businesslevel) Unrelated Diversification- Setup 7-Eleven kiosk offering
fast and fresh food that can be consumed immediately.
6. S1 + (O13, O10) - Cooperative Strategy (business-level)
Aggresively identifying suitable entrepreneurs to franchise its
stores to them
7. (S1, S6, S15, S7) + O5 - International Strategy (business
-level) To enter into overseas market i.e. Shanghai, China
and other potential countries.
8. (S11, S12, S13, S14) + O12 - Marketing Strategy
(functional -level) Targeting different segments of
customers, other than those that already have been
identified.

WO Strategies:
1. (W1, W4) + (O3, O15) - Operations Strategy
(Business-level) - To intensify marketing for online
delivery from nearest available stores for
customers' convenience due to their work routines.
2. W1 + O2 - Operations Strategy (Business-level)
- Instead of targeting the current sites, to open 7Eleven stores at sites with higher footfalls for
convenience.
3. W5 + (O5, O8) - Financial Strategy (Businesslevel) - Franchise its stores to entrepreneurs
instead of setting up new premises, and offer
capital financing to these entrepreneurs to
encourage setting up of more new stores.
4. (W1, W2) + O12 - Marketing and Pricing
Strategy (Business-level) To come up with new
marketing strategies to capture the young urban
profesionals.

liberalization of the economy - helped


held down prices.
Demographical opportunities
11. High density of footfalls in the
streets of Taiwan.
12. Young urban professionals who are
less price sensitive.

Demographical &
13. Relatively young population (73.4%
aged 15-64)
Buyer Power
they are not price sensitive switching
power is high
Physical environment opportunities
14. Vertical zoning (high rise buildings)
result in a flow of potential customers
24/7.
Technological opportunities
15. Opportunity in the bourgeoning
information technology (IT) sector.
Barrier to entries opportunities
16. 7-Eleven had the largest convenient
stores in Taiwan at 4,750.
Competitive rivalry
The street vendors are not hygienic
New Entrant
Limited land or store locations dues to
Taiwans physical conditions limits new
entrants capability to enter the market

Threats
Competitive rivalry threats
1. Highest density of convenience stores
in the world - each store is located
approximately 6 minutes apart.
2. Competition from local convenience
stores (i.e. Family Mart, Hi-Life and OK).
Substitute threats
3. Competition with presence from
almost all major global retailers in
Taiwan (eg Carrefour, Pizza Hut,
Starbucks, McDonalds).
4. Street vendors who offer low-cost and
tasty food.
Buyers threats
5. Customers are sensitive to prices (eg.
housewifes).
New entrant threats
6. Scarcity of freestanding sites limited
oppportunities to build new stores from
the ground up.
7.Taiwanese market was small and
unable to build scale from a single
business.

ST Strategies:
1. S15 + (T1 , T2, T6) - (Acquisition strategy) Acquire
competitors: to gain market shares and reduce rivalry using
company generated revenue and profit. Choosing the right
competitors to acquire and attack the remaining competitors
using other strategy.
2. S1 + T3 , S8 + T5 - Cooperative Strategy (Corporate-level)
- Strategic alliance on procurement: bulk purchase of
supplies, increase the efficiency of the economies of scale,
create cost bargaining power of buyers, cost leadership
3. S3 + T4 - Marketing Strategy (Business-level)Marketing/Promotion on healthier food
4. S13 + T5 - Marketing Strategy (Business-level) Marketing/Promotion on discount or rebate for using the iCash
to purchase from 7-11
5. S9 + T7 - Diversification Strategy (Business-Level) Establish platform and enter e-commerce market.
6. S13 + T3 - Marketing Strategy (Business-level) Leverage on
i-cash card advantage to collaborate with competitors by
adding additional receiving terminals (such as Carrefour,
Pizza Hut and other large franchises) of the i-cash card.
However, provide added benefits for usage at 7-eleven to
maintain attractiveness.

WT Strategies:
1. (W1 , W3) + T5 - Marketing Strategy (Businesslevel) - Marketing/Promotion on discount or rebate
for using the iCash to purchase from 7-11
2. W2 + T6 - Acquire competitors (Acquisition
strategy) - that has already set foot in Taiwan with
strong presence and the suitable store space to
overcome unavailability of suitable / convenient
new stores
3. W4 + T5, W5 + T6 - Cooperative Strategy
(Business-level) - Collaboration with major petrol
stations to rent new store space rather than buy
new store, reducing capital expenditure and
unavailability of suitable / convenient new stores
4. W5 + T6 - Operation Strategy (Business-level) Expansion by renting store space rather than buy
new store, reducing capital expenditure and
unavailability of suitable / convenient new stores